Rumor Du Jour: Fiat Weds PSA

Bertel Schmitt
by Bertel Schmitt
rumor du jour fiat weds psa

Fiat shares opened up 7 percent at 4.64 Euros, following a newspaper report on a plan to merge with PSA, Reuters reports. The Il Sole 24 Ore newspaper said Italian investment bank Mediobanca has drawn up a report together with a strategic consultant on merging the two companies, and that Fiat Chief Executive, Sergio Marchionne, had yet to decide if or when to present the plan to the board.

A few hours later, Reuters came out with the story that Fiat’s board is not considering a plan to merge with another car maker. How could they, if Sergio is still sitting on it? Fiat then put out a statement saying that they are still interested in collaborating with other car makers to cut costs and enter new markets: “No proposal for a merger with another automotive group is currently under consideration. It is a known fact that Fiat frequently examines opportunities for agreements of various types which would offer it operational synergies and access to new markets.” And what’s Paris saying to the advances?

A PSA spokesman declined comment but reiterated recent comments made by a PSA executive about the moment not being right to talk about mergers while management has more important things on their plate, such as dealing with the market downturn.

Morgan Stanley analyst, Adam Jonas, thinks European automakers are between a rock (their governments) and a hard place (the market). According to Jonas, the only justification for a merger between the two car makers would be to cut costs, production capacity and headcount dramatically.

“That is the logic and that logic is diametrically opposed to the political agenda in Europe right now,” he said. Governments try their darndest to prevent massive job losses in the industry. The Italian government probably would look kindly on the secret Fiat plan. Il Sole 24 Ore said the plan would have PSA rather than Fiat cut jobs at its factories in exchange for having the head offices of the merged company based in Paris. Marchionne would be chief executive, it said. Moving from damp Torino to swank Paris would be a sacrifice worth taking.

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  • FromBrazil FromBrazil on Mar 13, 2009

    @Katie Nah. It's just Marchionne who would like that. He has many qualities, but this merger thing, I fear, is becoming irksome. Anyway, as Mr. Schmitt pointed out, none of these companies will go against the grain (their governments and public opinion). Maybe this exercise is a kind of gimmick to pressure their govs to give more bailout.

  • Dave Dave on Mar 13, 2009

    @ fromBrazil Think you're right - this is just a 'cunning plan' to scare national govts (and the EU) to ante up more €uros to avoid any merger that would cost jobs. Fiat already have their hands full with partnerships with PSA (vans), Suzuki (pseudo off roader) and Ford (their new Ka), plus they're digging into Crysler .... and they have salaried people taking forced vacation/layoff in Turin. Common sense says that they don't have the resource to manage all this while they're struggling to pay the wages. That said - Katie's right (as usual), if this is for real the fallout between the French and Italians would be hugely entertaining - imagine the French standing by while PSA plants were closed in favour of the Italians .... heck, French workers take to the streets over the price of fuel, importing British sheep and anything else that upsets them.

  • ToolGuy CXXVIII comments?!?
  • ToolGuy I did truck things with my truck this past week, twenty-odd miles from home (farther than usual). Recall that the interior bed space of my (modified) truck is 98" x 74". On the ride home yesterday the bed carried a 20 foot extension ladder (10 feet long, flagged 14 inches past the rear bumper), two other ladders, a smallish air compressor, a largish shop vac, three large bins, some materials, some scrap, and a slew of tool cases/bags. It was pretty full, is what I'm saying.The range of the Cybertruck would have been just fine. Nothing I carried had any substantial weight to it, in truck terms. The frunk would have been extremely useful (lock the tool cases there, out of the way of the Bed Stuff, away from prying eyes and grasping fingers -- you say I can charge my cordless tools there? bonus). Stainless steel plus no paint is a plus.Apparently the Cybertruck bed will be 78" long (but over 96" with the tailgate folded down) and 60-65" wide. And then Tesla promises "100 cubic feet of exterior, lockable storage — including the under-bed, frunk and sail pillars." Underbed storage requires the bed to be clear of other stuff, but bottom line everything would have fit, especially when we consider the second row of seats (tools and some materials out of the weather).Some days I was hauling mostly air on one leg of the trip. There were several store runs involved, some for 8-foot stock. One day I bummed a ride in a Roush Mustang. Three separate times other drivers tried to run into my truck (stainless steel panels, yes please). The fuel savings would be large enough for me to notice and to care.TL;DR: This truck would work for me, as a truck. Sample size = 1.
  • Art Vandelay Dodge should bring this back. They could sell it as the classic classic classic model
  • Surferjoe Still have a 2013 RDX, naturally aspirated V6, just can't get behind a 4 banger turbo.Also gloriously absent, ESS, lane departure warnings, etc.
  • ToolGuy Is it a genuine Top Hand? Oh, I forgot, I don't care. 🙂