Fiat's history lesson
Sergio Marchionne is following famous footprints as he tries to build an auto empire. But as the saying goes: Those who can't learn from history are doomed to repeat it.
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NEW YORK (Fortune) -- As Chrysler struggles to emerge from bankruptcy, its guardian angel has been Fiat's Sergio Marchionne, ready to put his reputation on the line as the CEO of the reorganized company.
By blending Fiat's small car expertise with Chrysler's pickup trucks and minivans, Marchionne hopes to lift his Italian automaker up to serious fighting weight and give Chrysler a chance to survive.
But Marchionne's ambitions don't end there. Now we read that he is making a move on General Motors (GM, Fortune 500)' Opel to create a troika. "They are our perfect partner," he is quoted as saying (in an Italian newspaper owned by Fiat, it must be noted).
Well, we applaud Marchionne's ambition and his opportunism. There's no time like the bottom of an auto recession for picking up underpriced assets. (Note the use of "underpriced" and not "undervalued." Companies that look valuable at the beginning of a downturn often look less so coming out the other side).
But if he is a student of history, he will recall that other ambitious CEOs have been down this road before, only to find that what looked good on paper turned out to be far less appealing in steel and concrete.
Former Chrysler CEO Lee Iacocca used to dream of linking up with Volkswagen (or Fiat or Renault) and Japan's Mitsubishi. He and Fiat chairman Gianni Agnelli were particularly close, but nothing ever came of their musings. Iacocca had his hands full just keeping Chrysler on a steady course.
Former Ford CEO Jac Nasser went on an acquisition binge in 1999 and 2000. The Ford family discouraged him from making a bid for Nissan, but he was successful in acquiring Volvo and Land Rover. But Nasser never articulated any overarching strategy behind the acquisitions, and Ford (F, Fortune 500), having sold Land Rover to India's Tata, is now trying to get rid of Volvo.
The latest auto boss whose reach exceeded his grasp was Jurgen Schrempp of Daimler-Benz. Schrempp bought Chrysler in 1998 after his famous 17-minute meeting with Chrysler chairman Bob Eaton, and then picked up 33.4% of Mitsubishi in 2000 and a smaller stake in Korea's Hyundai.
Schrempp wanted to create a Welt AG (global corporation) but three of his stool's four legs turned wobbly and he was hustled off to retirement in 2006.
Will Marchionne have any better luck? The odds aren't in his favor.
First of all, auto companies are complex, asset-intensive, long lead-time businesses. It could take a decade to synchronize the product programs of two or three companies in order to achieve the necessary economies of scale.
Second, Opel isn't exactly a blue-chip acquisition. European and American auto companies represent the old order, and neither Fiat, Chrysler, nor Opel is in top fighting condition. The up-and-comers of the auto world are in Japan, Korea, and China. Besides, forecasts vary, but getting auto volumes in the Western world up to the levels of a few years ago could take a long time.
Finally, there are the inevitable culture clashes. Despite everyone's best intentions, a mixture of Italy, Germany, and Midwestern Detroit doesn't look promising under the best of circumstances.
If he wants advice, Marchionne could always dial up Iacocca, Nasser, or Schrempp. And should he fail in his quest, however at least he will be in good company. 
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