Fiat Chrysler and Peugeot confirm merger into one US$46-billion automaker

French and Italian-U.S. auto giants Renault and Fiat Chrysler are set to announce talks on an alliance, with a view to a potential merger, informed sources said this week.Marco Bertorello / AFP/Getty Images PSA Group and Fiat Chrysler Automobiles have agreed to combine to create the worlds fourth-biggest carmaker, as the manufacturers prepare to shoulder the costly investments in new technologies transforming the industry.In the biggest auto tie-up since Daimlers ill-fated purchase of Chrysler in 1998, the French and Italo-American carmakers will each own half of the enlarged business.The new company, with global sales of 8.7 million vehicles, will be run by PSA Chief Executive Officer Carlos Tavares, with Fiat Chairman John Elkann holding the same role.The transaction would forge a regional powerhouse to rival Germanys Volkswagen and, with a market value of about US$47 billion, surpassing Ford. It will take as long as 15 months to complete, pending approvals by shareholders of both companies and by regulators, the carmakers estimated.Like executives across the industry, Tavares and Elkann are responding to growing pressure to pool resources for product development, manufacturing and purchasing in the face of trade wars and an expensive shift toward electric and self-driving technology.(Indeed, industry sources said that in the future, the new company plans to move “more than two-thirds” of production to “just two platforms, with 3 million cars per year on a compact/midsize platform and 2.6 million on a small platform,” reports Automotive News. “The smaller platform will be PSA’s CMP architecture and larger cars will be on the group’s EMP2 (while) Ram pickups and larger Jeep models will continue to use FCA underpinnings.” —Ed.)The challenges of our industry are really, really significant, Tavares, 61, told reporters on a call Wednesday. The green deal, autonomous vehicles, connectivity and all those topics need significant resources, strengths, skills and expertise.In an era when size is becoming ever more important, the deal will turn the two mid-sized carmakers into a global heavyweight, with a stable of popular brands and annual vehicle sales surpassing General Motors. The combination will give Peugeot-maker PSA a long-sought presence in North America and should help Fiat gain ground in developing low-emission technology, where its lagged rivals. Yet the new company will still be heavily reliant on Europes sluggish and saturated auto market, and poorly positioned in China, the worlds largest country for car sales.The companies are aiming to extract 3.7 billion euros in annual synergies from the deal, without closing any plants, unchanged from the target they announced when they disclosed their merger discussions. Chinas Dongfeng Motor Corp., which owns 12 per cent of PSA, will see its stake in the combined company decline to 4.5 per cent as a result of the deal and the sale of a portion of its holding to the French carmaker.Dongfengs stake in PSA has attracted attention because of the possibility it could interfere with U.S. regulatory approval. U.S. economic adviser Larry Kudlow said last month the Trump administration would review the proposed merger because the deal would give the Chinese carmaker a stake in the combined
Origin: Fiat Chrysler and Peugeot confirm merger into one US$46-billion automaker

Merger confirmed for PSA and Fiat Chrysler groups

Merger confirmed for PSA and Fiat Chrysler groups The deal will create the fourth largest car maker in the world The PSA Group and FCA have agreed to merge in a deal worth £39 billion, which will create the fourth largest car manufacturing group in the world. Having been in discussions for the past six weeks, the two companies have confirmed a full merger, which will see global sales of around 8.7 million vehicles. The deal is set to be completed in the next year or so. A name for the new group is yet to be decided upon, though current PSA boss Carlos Tavares will become CEO of the group. The deal is expected to see annual cost savings of more than £3 billion due to increased purchasing power, shared development costs, and platform, technology, and powertrain sharing. The PSA Group accounts for the Peugeot, Citroen, DS Automobiles, and Opel/Vauxhall brands. These will join the Fiat Chrysler Automobiles group brands which include Fiat, Chrysler, Jeep, Alfa Romeo, Abarth, Maserati, Lancia, and Dodge. Both manufacturing groups have previously announced wide-reaching electrification plans, with the PSA Group on the cusp of a large-scale launch of electric vehicles in the UK and Europe. The Peugeot e-208, Vauxhall Corsa-e, and DS 3 Crossback E-Tense are all available to order with deliveries starting soon, and there are other pure electric models on their way. These are supported by a similarly wide-reaching set of PHEVs, including saloon, estate, and SUV models. The FCA Group has a number of plans in place, though is further away from launching electric models. A pure-electric Fiat 500 has previously been confirmed, and is expected to remain in the pipeline even with the new deal. Likewise, plants in Italy are already being converted to allow the production of electric cars, and the merger is only likely to speed up FCA’s brands in bringing EVs to market. The PSA Group is large in Europe, but has relatively limited reach elsewhere in the world. Likely to have been of great appeal to the French-based firm is FCA’s extensive reach in North American markets, while the likes of FCA’s Fiat, Lancia, and Alfa Romeo will likely benefit from shared developments from PSA.
Origin: Merger confirmed for PSA and Fiat Chrysler groups

GM sues Fiat Chrysler, alleging corruption undermined its UAW deals

Then-FCA CEO Sergio Marchionne, left, is seen with Jeep brand President and CEO Mike Manley at the Jefferson North Assembly Plant, in Detroit in 2010.Carlos Osorio / The Associated Press General Motors hit Fiat Chrysler Automobiles with a blockbuster racketeering lawsuit November 20, alleging bribery and corruption that has sent union and company leaders to jail ultimately cost GM billions of dollars by tainting labor contracts as far back as 2009.GM filed suit in federal court in Michigan on Wednesday seeking to recoup unspecified damages from its rival, which has in the past denied being aware three former executives conspired with United Auto Workers officials to undermine labor law.GM strikes at the heart of that defense, alleging the late Fiat Chief Executive Officer Sergio Marchionne himself authorized bribes with the ultimate aim of weakening a competitor and forcing a merger.Fiat Chrysler said its astonished by the suit and speculated that GM may be trying to undercut a planned merger with Frances PSA Group and active negotiations with the UAW over a new labor contract. We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it, the company said in an emailed statement. GM alleges Marchionne, who died last year, and the former company officials corrupted the collective bargaining process between the UAW and Detroits three automakers in 2009, 2011 and 2015. That resulted in unfairly high labor costs for GM, putting the company at a competitive disadvantage, Craig Glidden, the automakers general counsel, told reporters during a briefing at the companys Detroit headquarters.The multi-year bribery scheme FCA led undermined the integrity of the collective bargaining process and caused GM substantial damages, Glidden said, referring to Fiat Chrysler Automobiles. The attempted merger with PSA has no bearing on GMs complaint, he said.Competitive EdgeThe suit targets Fiat Chrysler and former company officials who pleaded guilty and were sentenced to prison for their roles in the corruption scandal, including Al Iacobelli, who had served as vice president and lead UAW negotiator.Competitive advantages provided to Fiat Chrysler but denied to GM included a higher portion of lower-paid workers, a streamlined grievance process and looser limits on use of temporary employees, according to GM.‘Fat, Dumb and Happy’Federal prosecutors have said Fiat Chrysler executives provided gifts aimed at keeping union officials fat, dumb and happy as part of a widening probe that dates back at least two years. Earlier this month, UAW President Gary Jones took an indefinite leave of absence after reports tied him to the scandal. Federal agents raided his Detroit-area home in August.Jones has not been charged in the case, and the UAW has said previously he was not involved in any wrongdoing.Iacobelli, who unexpectedly left Fiat Chrysler in June 2015 just before the start of UAW contract talks, has said that while serving as the automakers head of labor relations, he helped funnel $1.5 million from a worker training center to union officials, who spent the money on lavish gifts for themselves including jewelry and designer clothing.Shortly after Iacobelli pleaded guilty early last year, the UAWs then-president, Williams, denied the negotiations with Fiat Chrysler had been influenced by the diversion of
Origin: GM sues Fiat Chrysler, alleging corruption undermined its UAW deals

Peugeot board approves Fiat Chrysler merger plans, says report

PSA Peugeot Citroen Chief Executive Carlos Tavares delivers a speech during the presentation of the companys 2018 full year results, in Rueil Malmaison, west of Paris, Tuesday, February 26, 2019.Thibault Camus / Getty The board of French carmaker PSA Group has approved a plan to merge with Italian-American rival Fiat Chrysler Automobiles, a combination that would create one of the worlds largest auto manufacturers, according to people familiar with the matter.The new board would be made up of 11 members, with six from the PSA side including Chief Executive Officer Carlos Tavares, who will lead the new company. Fiat Chairman John Elkann would take the same role at the enlarged group.Fiat Chryslers directors are scheduled to meet later Wednesday to discuss the proposal, the people said. The plan authorized by PSAs board calls for negotiations of a binding memorandum of understanding that could last several weeks, said one of the people. A representative for PSA, the maker of Peugeot and Citroen cars, declined to comment. A Fiat spokesman wasnt immediately available to comment.A merger of Fiat Chrysler and PSA, the No. 2 for car sales in Europe, would create a regional powerhouse to rival Volkswagen, with a stock-market value of about US$49 billion comparable to Japans Honda. The tie-up would also bring together two auto-making dynasties, the billionaire Agnelli clan in Italy and the Peugeot family of France.The merger plan comes several months after Fiat Chrysler and PSA explored a partnership on pooling investment to build cars in Europe, and following the collapse in June of negotiations between the Fiat and French competitor Renault SA.Automakers face tremendous pressure to pool their resources for platform development, manufacturing and purchasing as they battle through trade wars, a global slowdown and an expensive shift toward electrification and autonomous driving. Producers face the additional burden in Europe of new rules on emissions.Against this backdrop, the pace of dealmaking has picked up. Volkswagen in July said it will work with Ford on electric and self-driving car technology, while Toyota is strengthening ties with partners such as Subaru and Chinas BYD. The Indian conglomerate that owns Jaguar Land Rover has said its open to finding partners for the British automaker but isnt planning on selling the embattled unit.Tavares has sought to re-establish Peugeots foothold in the U.S., a market it exited in 1991. He set plans earlier this year for a return, with shipments starting from Europe or China in 2026.Fiat Chrysler is seen as a laggard in new technologies such as electrification and autonomy, which are expected to cost automakers billions of dollars over the next decade.The company has sought to secure its future with a larger partner for several years, dating back to late CEO Sergio Marchionnes failed courtship of General Motors. After being rebuffed by GM in 2015, rumors of talks with other automakers have swirled with varying
Origin: Peugeot board approves Fiat Chrysler merger plans, says report

BREAKING: PSA Group and Fiat Chrysler confirm merger plans

The PSA Group and Fiat Chrysler Automobiles have confirmed plans to merge on a 50/50 basis, firming up yesterday’s news that the two companies were in discussions regarding such a move. Both firms said today that the discussions would be finalised “in the coming weeks” to reach a binding Memorandum of Understanding, which will create one of the world’s largest automotive groups. They added that the “combined entity would leverage its strong global RD footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency”. The likely merger will create a car giant worth around £40 billion and encompass some of the world’s biggest car brands. FCA owns Fiat, Jeep, Alfa Romeo, Maserati, Ram, Lancia and Chrysler, while the PSA stable includes Peugeot, Citroën, DS and Vauxhall-Opel. The deal would create the fourth largest car manufacturer globally in terms of annual sales, at 8.7m vehicles, behind Volkswagen Group, Toyota and the Renault-Nissan-Mitsubishi alliance, as well as revenues of €170bn (£147bn) and recurring operating profit of over €11bn (£9.5bn). Today’s announcement also stated there are estimated synergies of €3.7bn (£3.14bn) synergies annually “without any plant closures resulting from the transaction”. This would come from a more efficient allocation of resources for major investments in vehicle platforms, powertrain and technology as well as purchasing power. The two firms projected that 80% of the synergies would be achieved after four years. The shareholders of FCA and PSA will each take a 50 per cent stake in a new Dutch parent company, under the proposals, with the governance structure balanced between the two firms. There would be 11 board members, with five nominated by FCA and five by PSA. Current FCA chairman John Elkann will become the chairman of the new firm, while PSA group boss Carlos Tavares would become the CEO, standing on an initial five-year term. PSA Group chief Carlos Tavares is famous for cutting costs – for example, turning Vauxhall into profit in under 12 months of taking ownership – and PSA and FCA claimed the merger would make “among the highest margins in the markets where it would operate,” based on FCA’s strength in the Americas and PSA Group’s in Europe. As well as broadening the global reach of both firms, the merger will also mean the new entity will comprehensively cover all areas of the market including luxury, premium, volume, trucks and light commercial vehicles. PSA Group boss Carlos Tavares said: “This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity. I’m pleased with the work already done with Mike and will be very happy to work with him to build a great company together.” FCA chief Mike Manley said: “I’m delighted by the opportunity to work with Carlos and his team on this potentially industry-changing combination. We have a long history of successful cooperation with Groupe PSA and I am convinced that together with our great people we can create a world class global mobility company.” FCA has already been in the news this year regarding mergers. It held extended talks with Group Renault over a possible partnership but those talks broke down after the two firms could not reach an agreement, thought to be hampered by Renault’s alliance with Nissan and the French government. Tavares led the purchase of Vauxhall-Opel and has been keen to expand the firm for some time, either through partnership or further acquisition. PSA is understood to have previously looked at buying Jaguar Land
Origin: BREAKING: PSA Group and Fiat Chrysler confirm merger plans

Fiat Chrysler reportedly looking at a merger with Peugeot

Peugeot e-Legend ConceptPeugeot Fiat Chrysler Automobiles is considering a merger with European conglomerate PSA, the group that owns Peugeot, Citroen, DS, Opel and Vauxhall, according to a report from The Wall Street Journal breaking late October.If the deal goes through, it could create a US$50-billion global Goliath of a company, with Peugeot CEO Carlos Tavares at the helm of the joint venture, says the Journal.FCA chairman John Elkmann would continue in his current role after the merger.Tavares is, among other things, credited with saving Opel from the dustbin. PSA purchased the brand from General Motors back in 2017, and the exec got Opel to turn a profit just 18 months later. PSA is hoping to break back into the U.S. markets, where it hasnt sold a car in more than 20 years. Its unclear how brand operations would be structured after the merger.FCA had previously tried to merge with another French car company, Renault, at the beginning of 2019. That deal would have seen FCA take over a 50-per-cent stake in that company, but instead, the deal fell apart when the French government, which has a 15-per-cent stake in Renault, got between the two automakers.Even before FCA courted Renault, PSA had originally talked about a merger with the Italian-American carmaker, but FCA rebuffed it; at the time, Fiat Chrysler execs felt as if a merger wouldnt solve any of its money problems in the weakening European market.PSA and Fiat Chrysler already build commercial vans together as a joint-venture; the products of that partnership include the Fiat Ducato, Peugeot Boxer and Citroen
Origin: Fiat Chrysler reportedly looking at a merger with Peugeot

GM, Toyota and Chrysler side with Trump in emissions battle with California

US President Donald Trump leaves after speaking at the Major Cities Chiefs Association and Major County Sheriffs Association Winter Meeting in Washington, DC, February 8, 2017.Getty General Motors, Toyota and Fiat Chrysler plan to back President Donald Trump in a contentious battle with California officials over automobile emissions rules, splitting with major rivals including Ford.GM, Toyota and several other automakers plan to intervene on the administrations behalf in a lawsuit filed by environmental groups challenging the U.S. Department of Transportations rule stripping California of its ability to regulate tailpipe greenhouse gas emissions.The move was announced Monday by John Bozzella, a spokesman for the companies siding with the administration, who call themselves the Coalition for Sustainable Automotive Regulation.California and more than 20 other states have filed suit to block the administration’s plan to revoke the state’s powers, a legal battle that threatens to tie up the critical industry standards in litigation for years with an uncertain outcome. With our industry facing the possibility of multiple overlapping and inconsistent standards that drive up costs and penalize consumers, we had an obligation to intervene, said Bozzella, who is also chief executive officer of the Association of Global Automakers, an industry trade group. The decision to intervene in the lawsuit is about how the standard should be applied, not what the standard should be.The Trump administration last year proposed to dramatically ease federal automobile greenhouse gas emission and fuel economy standards that had previously been coordinated with California. California officials rebuffed and vowed to continue to enforcing their more stringent standards, which are in place through 2025.The move by GM and the other companies breaks with Ford, Honda, BMW and Volkswagen, which in July agreed to meet tougher emissions targets set by California. The automakers siding with the administration were harshly criticized by some Democrats, environmental organizations and California regulators.Mary Nichols, chairman of the California Air Resources Board, said in a statement that the state regulator was disappointed in automakers hiding behind the Trump administrations skirts and its assault on public health.Most automakers have urged officials in Washington and Sacramento for more than a year to compromise, but no deal materialized after limited talks broke down earlier this year.Still, Bozzella said he held out hope for a middle ground. We can still reach an agreement that is supported by all the parties, he
Origin: GM, Toyota and Chrysler side with Trump in emissions battle with California

PSA Group and Fiat Chrysler confirm merger talks

Fiat Chrysler Automobiles is holding merger talks with the PSA Group that would create one of the world’s biggest car groups. The Financial Times has reported that the two firms have been in talks for several months over a merger. Both companies have now confirmed the talks. PSA issued a statement that said: “Following recent reports on a possible business combination between Groupe PSA and FCA Group, Groupe PSA confirms there are ongoing discussions aimed at creating one of the world’s leading automotive groups.” A similar statement from FCA read: “Following recent reports on a possible business combination between Groupe PSA and FCA Group, Fiat Chrysler Automobiles NV confirms there are ongoing discussions aimed at creating one of the world’s leading mobility groups. “FCA has nothing further to add at this time.” The potential merger would create a car giant worth around £40 billion and encompassing some of the world’s biggest car brands. FCA owns Fiat, Jeep, Alfa Romeo, Maserati, Ram, Lancia and Chrysler, while the PSA stable includes Peugeot, Citroën, DS and Vauxhall-Opel. FCA has been looking for a partner for some time, and earlier this year held extended talks with Group Renault over a possible partnership. But those talks broke down after the two firms could not reach an agreement. PSA boss Carlos Tavares led the purchase of Vauxhall-Opel and has been keen to expand the firm for some time, either through partnership or further acquisition. PSA is understood to have previously looked at buying Jaguar Land Rover, and has previously held talks with
Origin: PSA Group and Fiat Chrysler confirm merger talks

Chrysler may re-label the Voyager the ‘Grand Caravan’ in Canada

2020 Chrysler VoyagerFCA Chrysler’s new-old Voyager minivan nameplate might wear a Dodge Grand Caravan badge in Canada and wind up being the inevitable replacement for that aging model, according to a new report from Allpar.com.Its all a bit confusing, as the Grand Caravan is supposed to be discontinued come May 2020, but for us Canadians, the nameplate won’t be tossed out but instead tossed over to the Chrysler division to sit on its new economy-spec version of the Pacifica van, the Voyager.The reason FCA wants to keep the Dodge nameplate around in Canada might purely be for marketing, reasons as Canadians seem to covet the Dodge more than the Chrysler.In 2018 the Dodge Caravan outsold every other minivan on the market, including the Chrysler Pacifica, so this could be a chance for FCA to subtly move some of that success toward the Chrysler brand.The Voyager is really nothing more than just a re-badged version of the lowest L and LX trim Pacifica anyway. It seems weird to have a totally different nameplate for whats essentially the same van in a neighbouring market, but maybe the plan will work for FCA.While the current Dodge Grand Caravan and Chrysler Pacifica are similar only in minivan body style, they have vastly different styling and a vastly different price. The Pacifica can be as cheap as $36,995, but the Grand Caravan undercuts that by another $5,250.If these rumours are true, the Grand Caravan name would continue to be worn by the cheapest minivan, and would likely still be the best-selling, if FCA keeps it around. The Pacifica, meanwhile, will be positioned as a step up for buyers who are hoping for a more luxury-minded
Origin: Chrysler may re-label the Voyager the ‘Grand Caravan’ in Canada

Reader Review: 2019 Chrysler Pacifica Limited S

Kenton Smith with the 2019 Chrysler Pacifica.Brendan Miller/Postmedia Kenton Smiths first family hauler was a 1999 Dodge Caravan. The Calgarian says he left the minivan world behind years ago but recognizes the market has evolved.We owned that vehicle a long time ago, and I tried to keep that from my mind as I drove the 2019 Chrysler Pacifica, essentially a reimagined minivan Smith explains.Consumers initially saw the Pacifica name on a midsize CUV that Chrysler built from 2004 to 2008. The name was dormant until Chrysler retired its Town and Country minivan, replacing it with the re-designed from the ground up and re-branded Pacifica in 2016. Then, the Pacifica rolled out on an all-new platform with dynamically styled (for a minivan) sheet metal. Updates for 2019 are minimal, apart from some new paint colours and appearance packages. A 3.6-litre V6 engine that produces 287 horsepower and 262 lb.-ft. of torque is paired with a nine-speed automatic transmission, and in Canada the Pacifica is available in seven trim levels, from base L to Limited. The minivan is also available as a plug-in hybrid.It looked smaller than I expected it would, Smith says of his first impression of the Pacifica Limited he drove that was finished in a $245 extra-cost Billet Metallic paint. His Limited with the Sport appearance package rang in at $64,260.He says, Theres something about the Pacificas proportions that make it look more compact to me, likely because its not as tall. The Sport package included larger 20-inch aluminum wheels finished in black. That blacked-out theme carried over to many of the exterior accents and badging, while the entire interior was black with Light Diesel Grey highlights and an S logo in select areas.I had no issue getting into the minivan, Smith says. The doors werent gigantic, but there was lots of space for my legs and it only took a moment to get settled in. I found the controls were close at hand, but there was a knob you turned to select the gear rather than a lever I found that odd at first.With a lever, the movement is guided and you dont often have to check if youre in Drive or Reverse. With the knob, I always double-checked because every notch or click in the rotation felt the same.Smith was impressed with the overall fit and finish, and says it leaned towards luxury vehicle quality. The Nappa leather seating surfaces on the heated and cooled front seats was grippy and the four-way power adjustable lumbar provided plenty of support.Instrumentation was clear and featured two large dials on the left and the right of the gauge cluster with a screen between the two that was configurable to display various vehicle information Smith mostly left it set to show vital trip statistics, including fuel economy.When I talk about it looking compact, Smith says, and continues, I felt that it drove big. It didnt have a very tight turning radius, and that always makes a vehicle feel bigger to me.Acceleration from a stop was great, it would get up and go but the transmission didnt feel well-suited to the engine. Merging or getting up to speed to pass, you really had to stomp down to get it to downshift.It has what it needs, but I just felt the gearing could have been better.Power aside, Smith says overall handling was great. The suspension was well-tuned, and he felt confident pushing the Pacifica through corners when taking on and off ramps. And, he always felt well-connected to the vehicle as it responded to his steering inputs.While spending the majority of his week-long test commuting in the city, Smith did travel north on the QEII Highway to Red Deer.It was comfortable on the highway and it handles well, Smith says. It was very windy with a significant cross breeze, and it felt impacted by that wind. Its been a couple of years since Ive had a minivan so I may just be forgetting what its like.It was a little noisier than I would have expected, and that was mostly road noise rather than wind noise, a bit surprising given the significant wind. There was rain on this trip, and the rain-sensing wipers worked well when rain was intermittent.The two sliding rear passenger doors and the liftgate are power-operated and were foot-activated. Smith says this feature worked well and was especially nice to have when approaching the Pacifica with hands full of packages.Theres lots of space behind the power-folding third row seats for storage, Smith says. I never did put the Stow-n-Go second row seats into the floor, but theyll fold flat and leave a level cargo area. You cant beat a minivan for that carrying capacity. Ultimately, while Smith liked the Pacifica, he had trouble wrapping his head around the price.In my opinion, I think youre getting up into the dollar figure of a luxury SUV, and there are lots of options when youre going to spend that much on a vehicle, he says, and concludes, But dont get me wrong, it was a great utility vehicle with a compromise between sport and luxury and you
Origin: Reader Review: 2019 Chrysler Pacifica Limited S