The Fiat 500 has arrived in the USA

In the midst of high gas prices and a trend toward smaller vehicles, the Fiat 500 is still a head-scratcher.  One simple reason:  price.

Per this story on Boston.com, the Fiat 500 will have a 101-hp engine starting at $16,000, topping out around $21,000.

While this vehicle is not meant to compete with, say, a Honda Civic - which has grown in size in lockstep with the Accord to the point that the Accord is now a "full size" car - it'll still be difficult to find a market for the upstream trim level, which will likely surpass $20K.  For $20K, you can get a Civic with decent features and the gas mileage will be about the same in an auto transmission: 34/27 for the AT Fiat 500, and 38mpg highway for the 2011 Civic coupe.

I can understand the novelty of such a vehicle but feel it will have a limited market, appealing to hipsters looking for something different as well as the article's protagonist - Boomers who are of Italian descent or who used to own a "CinqueCento" back in the day.

Still, one can hardly blame Marchionne for not showing all his cards in Fiat's first romp back in the States since 1984.  It didn't cost Fiat much to re-enter the market, having brought no cash to the table when obtaining a stake in the bankrupt Chrysler back in 2009.  So, much like with the Alfa 8C Competezione, he's aiming for a very targeted campaign, hoping they sell out, and having this car be, in effect, free advertising for the next wave of more sensible Fiat vehicles. 

Here's to hoping Fiat sells out the 500 at all of the 130 dealerships at which it will be offered, and we see more Fiats and Alfas in the coming years.

Supreme Court Delays Sale of Chrysler

The sale of the core Chrysler business to Fiat is at the heart of Barack Obama's plans to save the automaker from liquidation, something which the administration's lawyers argued is inevitable if the Italians walk away. Under the terms of the agreement, the deal must be completed by 15 June.

Fiat will emerge with management control and with an initial 20 per cent ownership of Chrysler under the deal, hammered out ahead of the bankruptcy filing at the end of March. A union-run healthcare trust will own most of the company, while unsecured bondholders will get only a sliver. Mr Obama condemned hedge funds holding the bonds for refusing to sign up to the deal, but a trio of Indiana state pension funds continued to try to block it.

They lost in bankruptcy court, and in an appeals court ruling last Friday, but were given permission to pursue the matter at the Supreme Court. They argued that the interests of unsecured bondholders had illegally been placed behind those of the union.

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The Obama spin here is laughable: Chrysler is being sold because, since 1979, it has needed bailout after bailout & is in the business of providing pensions to former and current workers, instead of making great cars people want.

While I definitely want to see Fiat & Alfa vehicles sold here as soon as possible, I didn't know the majority shareholder of the new entity would be a union-run healthcare trust. This spells trouble, and this is exactly why Fiat refuses to put up any of their own cash to be part of this deal: because even Fiat knows subsidizing healthcare pensions and union corruption with their own money coming into this deal means that money disappears and is never heard from again.

Much as I hate to see the union be any part of this, I still want Ginsberg to finally let Chrysler die - in part, at least - and allow Fiat to take control to send the message that American car companies need to be more like Ford if they want to survive.

UPDATE 6/11/2009: It appears Chrysler is finally going to die, for the most part, as Fiat has been approved to take over all of Chrysler's assets. Let's hope this leads to a rebadging of the brand to Fiat and Chrysler finally dies a decent death, as should have happened in 1979.