Samsung Galaxy Note 7 fires put water on Fiat Chrysler talks
That stinks for all parties involved, for a variety of reasons.
Back in August, there were rumors swirling that Samsung might buy up Magnetti Marelli, Fiat Chrysler's auto-parts business. Of course, that was before Samsung's hot new phone proved literally too hot to handle.
The ensuing recalls, reissues and double-recalls seem to have slowed things down. Now, it appears talks between the two companies are on pause, Bloomberg reports. Samsung has bigger fish to fry as it deals with the fallout of producing fancy new phones that appear to enjoy catching fire.
Big-money purchases aren't a high priority at the moment, as Samsung will likely hemorrhage money as it recovers from its phone problems. Bloomberg points out that Samsung cut its operating profit outlook by $2.3 billion this quarter. Considering that the purchase of Magnetti Marelli could cost upward of $3 billion, it's probably wise for Samsung to put that deal on the back burner.
This will likely suck for Fiat Chrysler as much as it sucks for Samsung. Fiat Chrysler's been trying to make more money of late, and part of its strategy involves killing off compact-sedan production to focus on profit-padded trucks and SUVs.
Lacking the technological partnerships of many of its competitors, losing or delaying a deal with Samsung is salt in an already large wound. That said, it does still have a deal with Google, wherein the tech giant will use the automaker's Pacifica minivan to further develop its self-driving technology.
Samsung does own a piece of Chinese auto manufacturer BYD, but as more and more tech firms jump into the automotive pool, any delay could put Samsung behind the curve.