By on May 28, 2019


Perhaps sensing that Nissan and its alliance partner, Mitsubishi, feel like third wheels in the romancing of Renault by a merger-happy Fiat Chrysler, FCA Chairman John Elkann had kind words for the pair.

You’re appreciated. You’re valued. And you’re invited to the party.

In a statement sent to Japan’s Nikkei Asian Review on Tuesday, Elkann threw his arms around the two Japanese automakers, promising great things ahead if Renault decides to hook up with his company in a 50:50 merger.

“I have huge respect for Nissan and Mitsubishi, and their products and businesses,” Elkann wrote. “Our proposed merger with Renault will create the potential to build a global partnership with all three of these great companies during this period of unprecedented transformation in our industry.”

For Nissan, which has long felt that Renault is leading the dance, the merger talk comes at a time of financial hardship. Late last year, Nissan’s board of directors was compelled to drop Carlos Ghosn as chairman following his Tokyo arrest — the product of Nissan’s own internal investigation — on charges relating to financial misconduct. Earlier this month, the company’s CEO declared that his company had reached “rock bottom” — a statement backed up by the release of the previous year’s earnings report. That report showed a 45-percent drop in profits, with the current year expected to yield another 28-percent drop.

While a merger would halve Nissan’s 15-percent stake in partner Renault and perhaps reduce its influence over foreign decisions even more, Elkann said there’s room for everyone. By creating the world’s third-largest automaker, FCA aims to realize $5.6 billion in annual efficiencies. The Italian-American automaker would also gain platforms (useful small-car platforms, mainly), and electric vehicle technology its North America-centered lineup generally lacks.

“Our proposal to Renault is one we believe will be transformative in many positive ways,” Elkann wrote. “By proposing a business combination with Renault, our spirit is one of finding a common purpose that provides benefits for all our companies, embracing Nissan and Mitsubishi as valued and respected partners.”

For its part, Renault says it is studying FCA’s proposition “with interest.”

Arriving in Tokyo Tuesday for a meeting of alliance members, Renault CEO Thierry Bollore said he planned to discuss “all possibilities” related to the merger.

[Image: Fiat Chrysler Automobiles]

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23 Comments on “Fiat Chrysler Chairman to Nissan, Mitsubishi: Who’s Up for a Four-way?...”

  • avatar

    FCA is actually using the term “merger of equals” in its pitch to Renault. In the last one, Daimler called the shots and wrecked the healthy Chrysler that Iacocca had rebuilt.

    You have to wonder who would be calling the shots, with Renault having the upper hand with Nissan-Mitsubishi, and the French government involved. FCA had earlier had talks with PSA (Peougeot), now run by Ghosn’s former number 2, Carlos Tavares.

    Those talks went nowhere, I suspect because Tavares wants to be top dog. The Fiat-Chrysler proposal might just be another takeover like the one Marchionne and Fiat engineered for Chrysler.

    The bottom line is that platform and technology sharing can be accomplished without a merger of the companies. Setting up a separate company they all own a piece of, like the NUMMI setup between GM and Toyota, or the GEMA engine joint venture, would accomplish the same thing.

    • 0 avatar

      And there is something to be said for becoming the world’s third largest automaker, after Toyota and VW.

      I hate to see Jeep and RAM falling under the control of the French. Then again, we Americans lost Anheiser-Bush to the Belgiques and are now drinking Belgian Bud, sending the profits to Belgium…….

      • 0 avatar
        Dale Houston

        People still drink Budweiser?

        I am sure that I know people who drink Bud, but I’m not sure that I know anyone who admits it.

      • 0 avatar

        It’s all just business. Nobody said nothing when GM and Chrysler were running into financial trouble, and nobody bought no stocks when their stock price were low. Now they are all going patriotic when someone else buy it for a goodish deal.

        Wall streets owned enough stuff, and share holders are all over the globe owning shares all over the globe, there really isn’t anything to worry about.

      • 0 avatar

        Jeep was previously a subsidiary of these same French, and has more recently been a German brand. Today Jeep is an Italian brand with headquarters located in Amsterdam and London. Patriotism is a silly reason to drive a Jeep. History may be even a worse one.

        It does seem like Budweiser joining AB Inbev actually flickered into the awareness of their customers. Someone left a can of Lite Beer from Miller in my bar refrigerator during a get-together in November. That never happened when Budweiser was an American brand.

        • 0 avatar

          “Budweiser joining AB Inbev actually flickered into the awareness of their customers.”

          Yeah, I think so too. Ditto with SAB taking over Miller, et al.

          I drink a lot of beer, A LOT! It beats drinking that nasty hard water with a TDS of over 1000ppm that we get through our water system here.

          That water is good only for flushing toilets, because El Paso, TX needs the water.

          My favorite beer has been anything that Boston’s Jim Koch brings to market. Good stuff. Love it! Quality beer, brewed with understanding, love and caring.

          OTOH, we do spend a lot of time on the road and this past week and weekend we spent a lot of it at the Route 66 RV Resort where we hosted a get-together of 14 Good Sams and their families.

          The beer of choice? It was like fourteen different brands, along with soft drinks, RO Water, hard liquor and mixed drinks.

          Goes to show, to each his own.

          And NONE was left behind.

          • 0 avatar

            I don’t know about Boston Beer. I would take Victory over it. But I would take Czech and Polish beers before anything else

          • 0 avatar

            Are you in the US? When in Eastern Europe, drink Eastern European beers. The US now makes any number of IPAs that can compete with anything and the macro-breweries are starting to cover more of the country. Ballast Point Sculpin, Stone IPA, and Sierra Nevada Torpedo are just about available nationally, and they’ll shame anything that came over in a ship or was contract manufactured in Canada. When I go to grocery stores, it seems like German and Canadian beers are no longer stocked at all. They’re pretty much specialty products now where they were once everywhere. They’ve been replaced by the growth of high quality domestic beers and the popularity of inexpensive Mexican beer.

          • 0 avatar

            ” high quality domestic beers and the popularity of inexpensive Mexican beer.”

            You got that right.

            And as far as slavuta’s Victory, I try and sample any and all beer that I encounter during my travels.

            Hell, if I survived that Vietnamese 33 horsep1ss beer in 1967, every other beer has got to taste better than that, and Kirin; the only two beers we were able to get on the Vietnamese economy in Nha Trang when I was there.

  • avatar

    A merger of mediocres – almost all of the “best known” brands (e.g. Fiat, Renault, Nissan, Mitsubishi, Chrysler, Dodge) are mass-market brands that make little profit selling cars to those with low credit scores, and none offer a product that is class leading in sales or quality except Chrysler with the Pacifica and Nissan with the money losing Leaf. The “prestige” brands are all also-rans and mediocrities (Alfa, Infiniti, Maserati, Lancia?, Chrysler?). The only part of the proposed merger that is worth anything are Jeep and Ram, and Ram is a US market only phenomenon dependent on cheap fuel prices and continuation of the pickup fad. Arguably, the smart solution would be to jettison everything except Jeep and Ram, but the investment banks wouldn’t make any money on that deal and national pride is at stake, so that won’t happen.

  • avatar

    Elkann is merely being polite, I believe. Merging 2 companies of roughly equal size is already a hugely difficult task – and one that is more likely to lead to civil war than commercial success. Putting 4 companies together at once when there is no single dominant entity is next to impossible.

    If this deal goes forward, it will be by Renault and FCA negotiating the structure and divvying up the top jobs. Nissan and Mitsubishi may ask or be invited to join in afterwards, but it will be to get shoehorned into the new structure as add-ons, not as full participants.

    It does seem clear that that Nissan would like to sever all ties to Renault and the Renault has every reason not to want to do Nissan any favours.

  • avatar

    OUR problem here is that consumer will not benefit. They want to unite their purchasing power, so they can squeeze every penny out. But their product, while somewhat attractive, will still not come closer to bullet-proof in reliability.

  • avatar

    Hey Nissan, you can come to the party, just leave your crappy CVTs at the door.

    • 0 avatar

      Not likely that Nissan will leave their CVTs at the door. They have bet their profit margin on the cheaper-to-produce JATCO CVTs.

      Regrettably, Toyota and Honda are doing the same as CVTs are beginning to replace hydraulic step-transmissions in their light-duty passenger cars.

      But to give Nissan credit where credit is due, Nissan does have one hell of an automatic in their Titan-series S and SV pickup trucks. At our get-together this past week, two of the attendees who travel in pairs drove Titan 5.6L pickups, each towing a HUGE camping trailer.

      The owners had switched to Titans within the past two years to replace their previous worn-out tow-vehicles because the Titan’s value-for-the-money cannot be beat by any other brand.

      As a former Tundra owner, I gained a lot of respect for the Titan, and the value it represents to the buyer.

      I hate to admit it, but the Titan even beats my beloved Tundras for value, at a much lower price. Like THOUSANDS LESS.

  • avatar

    Ugh. This is gonna be a disaster.

  • avatar

    Best article title ever.

  • avatar

    “By proposing a business combination with Renault, our spirit is one of finding a common purpose that provides benefits for all our companies, embracing Nissan and Mitsubishi as valued and respected partners.”

    Doomed by his own statements. He admits that Nissan and Mitsu are affiliates of Renault, which means you need to add Nissan and Mitsu’s market shares to that of FCA during anti-trust scrutiny, which makes the combine larger in the US than GM. Not going to fly in DC.

    This merger is the most obviously doomed that I have seen since the late 90s, when Staples, the #1 big box office supply store, tried to merge with Office Depot, the #2 big box office supply store. Anti-trust authorities blocked that one too.

  • avatar

    The sad truth is that the French automakers maybe in better shape than their US counterparts. PSA has already made Opel profitable, and Nissan has surpassed GM in world sales a few years ago.

    • 0 avatar

      Yes, but Carlos Tavares used the Ghosn method of ruthless cost-cutting at Opel – and he turned down a merger with FCA. Renault isn’t in that good a shape, and needed French government help before it hooked up with Nissan.

      Renault is supposed to make a quick decision, but with an election coming up, American approval will be a long, difficult process. Adding Nissan and Mitsubishi would only complicate matters. As Steve 203 mentioned above, it might be even tougher than Renault trying to merge with Nissan over the Japanese government’s opposition.

      • 0 avatar

        Do you think the US government doesn’t know that FCA is an Italian company with headquarters in London and Amsterdam? It doesn’t matter one fantastical bit what the US government thinks of this merger.

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