intellectual property marketplace for the industry.
"The center of gravity of the industry is here, both in leadership and technology," he said.
And that's important for the combined company that would count the U.S. as its biggest market.
Marchionne acknowledged as much: "Italy, in 2012, represented less than 10% of the overall sales of this group. And I think that's a stark reality for somebody who has been a Fiat aficionado all of his life."
Moreover, about 70% of U.S. auto research and development takes place in Michigan, which also is one of the world's major centers for automotive intellectual property, Cole said. All told, 350 industry suppliers have major research and development centers in Michigan. Technology titans Google, Microsoft and Intel also operate large offices in the region where they manage their relationships with the auto industry.
Even Chinese automakers, who don't yet sell cars in the U.S., are establishing offices in Detroit, Cole said.
"The Chinese have no lack of smart people or work ethic, but what they really lack is the automotive know-how and that is why they are setting up offices here," he said.
A move to New York, because of its proximity to Wall Street, or even business-friendly Delaware, might make as much sense as Detroit, said Wall, the IHS analyst.
Others, like Jack Nerad, executive market analyst for Kelley Blue Book, wondered if Marchionne might have something else up his sleeve, noting that this was a little like the Yankees baseball team threatening to leave New York City.
"Sergio does some things that are provocative just to do them, maybe to send a message that is not so obvious. Maybe a message to the Italian government and to Europe as well," Nerad said. "He has been pretty vocal in his criticism of how the auto industry is being run and regulated in Europe."
Nerad added: "He might be trying to gain some changes in the way they are allowed to go about their business."
But if Fiat does wind up in Detroit, or a suburb, it will be a coup for the beleaguered city, which is plagued by a declining population, blighted neighborhoods, high crime and a shrinking tax base.
Earlier this year, Michigan Gov. Rick Snyder appointed Kevyn Orr as emergency manager of the debt-ridden city, wresting control of Detroit's finances from Mayor Dave Bing.
Moving a global corporate headquarters to the city would be "ironic," Cole said, "because Detroit as a city has fallen apart. The problems are colossal."
Fiat is currently Europe's fourth-biggest automaker. Its share of the European auto market fell to 6.4% in 2012, down from 7.3% a year earlier.
Chrysler is the smallest of the "Detroit Three" automakers but has seen its sales grow steadily since the recession. It sold almost 1.7 million vehicles in the U.S. last year, a 20.6% gain from 2011. It's share of the U.S. auto market grew to 11.4% last year from 10.7% in the prior year, according to Autodata Corp.
(c)2013 the Los Angeles Times
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