FCA, PSA to Employees: Merger Deal Is Just Weeks Away

Steph Willems
by Steph Willems
fca psa to employees merger deal is just weeks away

Undaunted by General Motors’ racketeering lawsuit, Fiat Chrysler and partner Groupe PSA have told employees that the tentative $50 billion merger they agreed on last month will kick off in earnest in a matter of weeks.

The two automakers imply a binding agreement will be signed before year’s end — right on schedule.

The message to FCA and PSA employees, intercepted by Reuters, came through two internal channels, with those workers being told a team of 50 people were working on the tie-up. Under the proposed merger, the new entity would be headquartered in the Netherlands, with PSA’s Carlos Tavares serving as CEO and FCA’s John Elkann as chairman.

No brands at either automaker would be on the chopping block, Tavares claims.

In creating the world’s fourth-largest automaker, both companies would be able to take advantage of the other’s technological know-how, as well as their presence in regions where the other might like to make inroads. For PSA, Fiat Chrysler’s North American dealer network might help ease its re-entry into that market. For FCA, its partner’s overseas presence and electrification tech could come in handy — not to mention its small car platforms.

Money saved through efficiencies is targeted at $4.1 billion a year.

According to the message sent to employees, nine working groups have been created to help make the merger a reality. Heading up these teams are David Ostermann, FCA’s group treasurer and head of business development, as well as Olivier Bourges, PSA’s executive vice president for program and strategy.

Much has been said about the potential risks to the merger posed by GM’s lawsuit, which accuses FCA of bribing UAW officials in order to corrupt the collective bargaining process and draw favorable concessions from the union. How this might impact the merger really depends on the strength of GM’s evidence and its ability to prove its claims in court. Meanwhile, the proposed merger seems to be speeding towards an agreement.

Aside from refuting GM’s claims (and claiming the suit represents an attempt to scuttle the merger), FCA hasn’t said much about it. PSA chose the “no comment” route.

[Image: Matthew Guy/TTAC]

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  • Tstag Tstag on Nov 26, 2019

    A part of me really questions the wisdom of these mega mergers which seem designed to mask fundamental problems rather than address them. Far more impressive to me are the likes of Ford and Honda who stand alone with basically just one or two brands. Consider for example the relative success of an industry minnow like JLR. Sure they’ve had tough times but confront their challenges head on. Consider how a small company like JLR has beaten bigger players to market with an electric car, has expanded their range of products hugely in the past decade and has invested in new factories and plant while still more often than not turning a buck. For sure JLR and others like them may need partners to thrive but they achieve a lot with little. I think there is a lesson there for big car makers to learn from.

    • Inside Looking Out Inside Looking Out on Nov 26, 2019

      I thought they were brand under Ford and then Tata ownership. When they become independent? I missed that moment. And of course it was not Ford's money that developed new JLR models, because JLR is so profitable that they have no problem developing new platforms including one for BEV.

  • Akear Akear on Nov 26, 2019

    For the first time in nearly a century, FCA(Chrysler) will be larger then GM. It looks as if history will be made soon. GM - what a disgrace!

    • See 1 previous
    • Akear Akear on Nov 26, 2019

      @28-Cars-Later Due to protectionism I don't think GM can count on their Chinese made cars making it to US shores.

  • ToolGuy VW (marque not group) and Tesla very nearly switched positions on a YTD basis.
  • RHD Inexpensive gasoline appears to be a thing of the past. ILO is correct - we have enough sunlight, wind and emerging ocean wave energy to power the entire country and then some. Clean air is nice, and being free of the whims of OPEC, geopolitics and hugely profitable oil companies will do all of us a world of good.
  • Raymond Segura Can you tell me where I can get the rear bumper for 69 impala?
  • Art Vandelay some of the crazy numbers I get. Percentages look bigger with any fluctuations with low volume makes and brands leaving the market will see massive month over month changes. But what’s with Buick? I still see the occasional ad on TV and yet the drop is disproportionate even compared to all the other GM brands.
  • Master Baiter "There is no mandate for consumers to buy EVs, not in any country or state. That’s made up."Right. And you are not mandated to purchase a toilet that only uses 1.6 gallons/flush. You could choose to not have a toilet--just go in the woods, like the bears do.