By on June 13, 2019

It was downright amazing how fast the proposed merger between Fiat Chrysler Automobiles and the Renault-Nissan-Mitsubishi Alliance collapsed. Considering the auto group’s messy state, there may have been no alternative. While Nissan’s unwillingness to support the merger is often cited as a chief reason in FCA’s backing out, it seems the Italian-American company was similarly spooked by internal strife within the alliance.

Renault Chairman Jean-Dominique Senard addressed the matter on Wednesday during the automaker’s annual meeting in Paris. He told shareholders that the French government’s inability to act was what ultimately led to Fiat Chrysler backing out of the deal, while openly lamenting the missed opportunity.

“This project remains, in my head, absolutely remarkable and exceptional,” Senard said. “Frankly, I am saddened.”

According to Bloomberg, Renault’s chairman placed much of the blame on the French government. France wanted Nissan on board and asked Renault to postpone voting on the merger, but FCA turned tail and ran. Senard mentioned it was Finance Minister Bruno Le Maire who first suggested that Renault approach FCA earlier in the year, adding that he was, ironically, one of the people that insisted the deal wait on Nissan — which does not enjoy voting rights due to its minority stake in Renault.

“It was the first time there was a chance to create a European champion at a time when people keep complaining that it doesn’t exist,” he said. “This was a perfect example for France, for Renault and Europe to prove that we can do something together.”

From Bloomberg:

French Finance Minister Bruno Le Maire told franceinfo radio he was not responsible for derailing the merger deal’s collapse. “It remains in interesting opportunity. But I have always been very clear: that it should be in the context of a strategy to reinforce the [Renault-Nissan] alliance,” he said.

Le Maire said he would meet Senard but added he would tell him that strengthening the Renault-Nissan alliance was the priority. “As long as the French state is the main shareholder, its responsibility to the company, its employees, its factories and research centers is to fulfill its role with other shareholders in defining a strategy.”

The deal collapsed after Nissan said it would abstain at a Renault board meeting to vote on the merger proposal, prompting Le Maire to request the Renault board to postpone the vote for five days. “We simply asked for five extra days. Five additional days seems entirely reasonable to me,” Le Maire said. “Fiat withdrew its offer, as it was entitled to do. But believe me, the state will never react under pressure.”

During Wednesday’s meeting, Senard was also pressured about Renault’s decision to block corporate governance changes at Nissan. He denied that the decision was in response to the failed merger and claimed the proposed modifications wouldn’t provide Renault CEO Thierry Bollore the same representation on Nissan’s committees as Nissan-nominated directors have on committees of the French company’s board. “We’re not asking for more than this. It’s not a reason to start a war,” Senard said.

He also acknowledged that the fallout stemming from Carlos Ghosn’s arrest has been a major hurdle for both companies. Senard, who has been charged with repairing the fractured alliance in Ghosn’s stead, said the matter “left the alliance more damaged than what was initially apparent.”


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16 Comments on “Renault Chairman Opens Up About FCA Merger Failure...”

  • avatar

    ***My opinion, and worth what you paid for it***

    Senard has more spin than a Maytag.

    The investment banker’s game plan from the start was to ignore Nissan and merge with Renault, probably in the hope of breaking the Renault/Nissan alliance.

    Le Maire took issue with the way Nissan was being railroaded and was willing to do the extra legwork to bring Nissan on board, which is not what FCA or the bankers wanted, so they pulled the offer.

    Additionally, I figure Le Maire has looked at the way FCA has been starving Fiat, Lancia, Dodge and Chrysler, to fund Jeep, Ram, Alfa and Maserati, and figured that the same fate would await Renault as another maker of mass market vehicles, rather than high margin status symbols.

    Senard has only been with Renault a few months. having come over from Michelin last winter. I doubt he gives two hoots about Renault and is only seeing a bonus in the millions from the bankers, for little work, if the merger went through.

    So now Senard is pi$$ed that the government’s insistence that Nissan be respected as a Renault stakeholder cost him that big check from the bankers, so he is lashing out at both the government and Nissan.

    • 0 avatar

      Alfa Romeo and Maserati are among the brands FCA has starved as well.

      • 0 avatar

        I’d agree with Maserati being starved, but Alfa isn’t.

        • 0 avatar

          Yes it is. Alfa Romeo was supposed to be resuscitated as a brand, look how that turned out. The Giulia and Stelvio were launched in 2016, and are soon due for facelifts. After that there’s been nothing for three years, and nothing’s in the pipeline for this year. A perfect example of brand starvation (though there are worse examples within FCA, which is not really an automaker anymore, but a financial game).

          • 0 avatar

            Alfa’s had two brand new products in three model years (the Giulia was new for 2017 and the Stelvio was new for 2018).

            They do have a coupe in the works (though, granted, we all know that ‘in the works’ doesn’t always mean anything at FCA).

            Not a bad expansion for a brand whose sole vehicle was an tiny coupe that they sold about 13 copies of annually.

          • 0 avatar

            Too little money too many brands. It reminds me something.

      • 0 avatar

        “Alfa Romeo and Maserati are among the brands FCA has starved as well.”

        Current Maserati models and their introduction model year: Quattroporte: 2013, Ghibli: 2013, GranTurismo: 2007, Levante: 2017, AlfieriL: 2020?

        Current Alfa models and their introduction model year: Giulietta: 2010, 4C: 2013, Giulia: 2016, Stelvio: 2016, Rumor mill: GTV and 8C by 2022.

        Current Fiat models and their introduction model years: 500: 2007, Panda: 2011, Tipo: 2015, 500L: 2012, 500X: 2014.

        Dodge: Challenger: 2008, Charger 2006, Durango: 2011, Grand Caravan: 2008, Journey: 2009,

        Jeep: Renegade: 2014, Wrangler: 2018, Grand Cherokee: 2011, Compass 2016, Cherokee 2014.

        Newest Maserati: 2017, newest Alfa: 2016, newest Jeep: 2018, newest Fiat 2015, newest Dodge: 2011

        While Fiat isn’t as clearly left for dead as Dodge, it’s being left behind in new product introductions by the high priced, high margin halo cars.

  • avatar
    schmitt trigger

    Thanks for your opinion.
    While it is impossible to know exactly what transpired, I believe that your assessment is mostly accurate.

    I also believe that if the merger had actually occurred, the Nissan-Mitsubishi bloc would not have taken it lying down. Serious internal strife would have occurred.

  • avatar
    Jeff S

    2018 Global sales for the Alfa Romeo brand are 122,533

    2018 Global sales for the Fiat brand light vehicles is 1.5 million

    2018 Global sales for the Jeep brand are 431,777

    Jeep sales are almost 4 times what Alfa Romeo sales are Globally. This would support FCA investing more in newer Jeep models than Alfa Romeo.

    • 0 avatar

      “Jeep sales are almost 4 times what Alfa Romeo sales are Globally. This would support FCA investing more in newer Jeep models than Alfa Romeo.”

      By that logic, Fiat should be awash in new, competitive, models, as Fiat sells more than triple what Jeep sells. It isn’t, because management doesn’t care about volume, only average transaction price and gross margin/vehicle.

      Knowing management’s obsession with ATP, I can imagine the reaction when they see what happens to corporate ATP when they merge with Renault, and have hundreds of thousands, each, of Twingos, Cleos, Dusters, Sanderos and Logan’s skewing their numbers to the cheap end. I’m sure their reaction would be to jack prices up, and I can imagine the reaction when they try to charge a VW+ price for a Dacia.

  • avatar

    The worst move FCA ever did was get rid of Ferrari. It provided a big halo for Maserati & Alfa products and would be a big feather in the cap for whoever merged/bought FCA.
    On the plus side, Ferrari stock has been such a good investment that maybe I’ll be able to own one someday.

    • 0 avatar

      Maserati has been leather lined crap for about 50 years. Affiliations with Ferrari didn’t and won’t change that. Halo cars haven’t been a viable strategy in about that time either.

      FCA needs to invest in updating its products and getting up to speed with future technologies.

      • 0 avatar

        “Halo cars haven’t been a viable strategy in about that time either.”

        I don’t know about “halo cars” overall, but even with no trickle-down effect, Ferrari has been an extremely successful brand/company financially and I still say it was a big mistake for FCA to cut them loose.

  • avatar
    Jeff S

    So how many sales would FCA gain if they would have invested more in Alfa Romeo than Jeep? Maybe they would have gained some more sales in Europe but I doubt so in North America or even China. Alfa is competing against BMW, Mercedes, and Audi on a Global market. There is really only one Jeep. Fiat is a mass market brand so it would make sense to keep them for a Global Market but not so much in the US. Jeep had been long overdue for new products and apparently the new models have helped Jeep boost their sales.

    Also Jeep has some very profitable models–Renegade, Grand Cherokee, and the new Jeep truck–not exactly low priced vehicles.

  • avatar
    Michael S6

    Renault needs Nissan much more than FCA so it makes no sense for it to try to form another alliance. The only possible rational for this fiasco is that Renault attempted to force Nissan to complete the merger. Otherwise why wouldn’t it consult with Nissan about the FCA merger beforehand. Now Renault is conveniently blaming the French goverement for it’s “failure to merge” after Nissan said no go .

  • avatar
    Jeff S

    This merger would have been bad for both FCA and Renault. Both dodged a bullet.

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