Fiat Chrysler Chairman to Nissan, Mitsubishi: Who's Up for a Four-way?
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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“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.
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.