02/23/2009 05:12 am ET Updated May 25, 2011

Fiat Says "Buon Giorno!" to Chrysler

Amid the gathering gloom that is the global car industry, a little bit of zaniness just arrived to put a smile on everybody's face. Yes, Chrysler, the most struggling of the struggling Detroit Big Three automakers, has forged an alliance with Italy's Fiat. According to the terms of the deal, Fiat will take a 35-percent stake in Chrysler and provide both more fuel-efficient models for sale in the U.S. and a distribution channel in Europe for brands such as Jeep.

No one seems quite sure exactly what to make of this yet. On its face, it appears that Fiat's hard-charging CEO, Sergio Marchionne, is sticking to the playbook written by the car industry's only global superstar, Nissan/Renault CEO Carlos Gohsn. However, virtually bankrupt Chrysler, which took an initial round of bailout money from the government and will take more in Phase II later this year, isn't getting any cold hard operating cash from Fiat. This is because Fiat, despite recovering from the brink of ruin, isn"t in very solid financial shape itself.

Early takes on the partnership have ranged from ambivalent to skeptical. Charles P. Wallace, in Slate"s The Big Money (a site that I also contribute to), musters a ton of history and data to argue that transatlantic partnership in the auto business rarely work out. Ken Bensigner, in the LA Times, places the deal--distinguished by Fiat obtaining more than a third of Chrysler effectively for free -- in the context of a rather fraught new international business model. Wired, not surprisingly, reveled in the possibility that the alliance will bring the way-cool, revamped Fiat 500, an Italian legend, to our American shores.

Actually, the 500 represents an important element of the master plan (if there is one). Chrysler's bailout deal with the taxpayer is contingent on producing more fuel-efficient vehicles. Fiat's smaller, more cosmopolitan lineup -- of which the 500 is an exemplar -- fits the bill. However, it's worth noting that Fiat reinvented the 500 to compete with the Mini Cooper and the VW Beetle, and while the Italian ride may have the sprezzatura vote locked up, the Germans have locked down the twee, overdesigned stylemobile market in the U.S. There have been rumblings about Americans being able to buy Fiats and Afla Romeos in Chrysler dealerships, an opportunity that on its face seems fun, but there've also been distressing reports of the Fiats and Alfas that go on sale being rebadged as Chryslers. Your baffled response is appropriate: What would be the point of that?

In terms of sustainable mobility, the deal does have at least one thing going for it. The Big Three have traditionally not fared very well when it comes to building the small, hip cars that are common in Europe. Back in the 1970s, the Japanese jimmied open the U.S. market by assuming this role, and Detroit was glad to let them have it, as small cars are far less profitable that high-volume sedans and trucks. More recently, Detroit surrendered this market to the upstart Korean carmakers. Ford, of course, does produce small, fuel-sipping cars in Europe, but we never see them over here. In some respects, it just seems that natural condition of the small-car market in the U.S. is to be made up of zippy little cars, all designed according the principals of populism and frugality that defined the European market during the post-war Marshall Plan Era.

But that doesn't cast the Chrysler-Fiat linkage as anything other than hilarious. Chrysler has been through all manner of weirdness in the past decade, first being purchased by Daimler-Benz, only to be unloaded at a huge loss later to the Dark Lords of Cerberus Capital Management. Cerbereus now wants out, and the Fiat hookup is probably stage one of the separation process. But who knows if the two corporate cultures can mingle gracefully. Chrysler CEO Bob Nardelli is extremely embattled at the moment, while Fiat's Marchionne is riding relatively high. Detroit's dilapidated urban pretenses are no match for the kind of aristocratic vibe that Fiat embodies. This, after all, is a company that was raised to level of national treasure by Gianni Angelli, an icon of both industry and style. It formerly employed Lapo Elkann, an Angelli scion, dandified recovering substance-abuser, and consort of Mary-Kate Olsen.

Still, the amusing desperation of this Italo-American alliance is very much of our current crisis moment. The U.S. market was basically left to the ourselves and the Japanese over the past few decades, with the Germans providing luxury and performance. But there was a time when dashing Italian Alfas and petite French vehicles roamed our roads. And broke down. Often. But hey, after 30 years of staidly reliable Hondas, maybe it's time for Americans to rediscover Europhilia -- and re-establish a relationship with our mechanics.