Fiat did a pretty good job of reducing debt during the second quarter - it now stands at $8.1 billion, down from $9.4 billion at the end of Q1. However, Marchionne has rolled the dice in terms of a global car business, and the apparent rejection of his overtures per GM Europe suggest that he might have backed himself into a - albeit temporary - corner.
Fiat's plans would seem to demand the addition of another car manufacturer to the existing Fiat Auto / Chrysler combination. GM would have been nice - this is all relative - but, if GMEU is not for sale, then, presumably, SM will need to look elsewhere. Fiat and Chrysler by themselves do not seem to add up to Marchionne's dream number.
So if Fiat must look elsewhere, we assume that it is packing its chequebook. Despite the reduction in debt witnessed over the past 13 weeks, it seems reasonable to believe that it may need to bolster its reserves in order to go shopping. If this is indeed the case, then CNH and / or Iveco - or at least a part of Iveco - must look like contenders for the shop window.
We still like the Paccar idea, but Paccar has nary a pot to piss in right now, and so Pigott is unlikely to come up with a generous offer. Even should MP's vessel increase, Paccar is so utterly wedded to the 13 week cycle that such a move would take a lot of selling in Bellevue. But what remains to be seen is whether Marchionne could accept a lesser payment on the basis that it would be for the greater corporate good.