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Fiat Chrysler and Renault pursue $35-billion merger to combat car industry upheaval

MILAN/PARIS — Fiat Chrysler pitched a finely balanced merger of equals to Renault on Monday to tackle the costs of far-reaching technological and regulatory changes by creating the world's third-biggest automaker. If it goes ahead, the $35 billion-plus tie-up would alter the landscape for rivals including General Motors and Peugeot maker PSA Group, which recently held inconclusive talks with Fiat Chrysler (FCA), and could spur more deals. Renault said it was studying the proposal from Italian-American FCA with interest, and considered it friendly. Shares in both companies jumped more than 10 percent as investors welcomed the prospect of an enlarged business capable of producing more than 8.7 million vehicles a year and aiming for 5 billion euros ($5.6 billion) in annual savings. It would rank third in the global auto industry behind Japan's Toyota and Germany's Volkswagen. But analysts also warned of big complications, including Renault's existing alliance with Nissan, the French state's role as Renault's largest shareholder and potential opposition from politicians and workers to any cutbacks. "The market will be careful with these synergy numbers as much has been promised before and there isn't a single merger of equals that has ever succeeded in autos," Evercore ISI analyst Arndt Ellinghorst said. With these sensitivities in mind, FCA proposed an all-share merger under a listed Dutch holding company. After a 2.5 billion euro dividend for existing FCA shareholders - giving a big upfront boost to the Agnelli family that controls 29% of FCA - investors in each firm would hold half of the new entity. The merged group would be chaired by Agnelli family scion John Elkann, sources familiar with the talks told Reuters, while Renault chairman Jean-Dominique Senard would likely become CEO. Italian Deputy Prime Minister Matteo Salvini said the proposed merger could be good news for Italy if it helped FCA to grow, but it was crucial to preserve jobs. He did not comment on the French government's 15% stake in Renault, but an influential lawmaker from the ruling League party said Rome may seek a stake in the combined group to balance France's holding. A deal could also have profound repercussions for Renault's 20-year-old alliance with Nissan, already weakened by the crisis surrounding the arrest and ouster of former chairman Carlos Ghosn late last year. The Japanese carmaker has yet to comment on FCA's proposal.

2015 Chrysler 200 production gets underway [w/videos]

Chrysler announced recently that it has added some 800 new jobs at its Sterling Heights Assembly Plant (SHAP) to support the production of its all-new 2015 Chrysler 200 sedan. Total employment at the Sterling Heights, MI plant grows to almost 2,800 with the hires, an impressive figure for a plant that was slated for closure in 2010.
Speaking to a crowd of employees and community leaders, Fiat-Chrysler CEO Sergio Marchionne was on hand to celebrate the kick-off of 200 production last week. "We're making a big bet on its success," said Marchionne of the sedan, "we've invested nearly a billion dollars in this facility."
That billion-dollar bill has been used to construct a spanking new paint shop, install a new body shop and install "machinery, tooling and material-handling equipment" according to the Chrysler press release. The company says that SHAP now runs to nearly five million square feet of manufacturing space - loads of room for all the new employees to do their thing - and that the facility can handle multiple vehicles on two unique architectures.

Chrysler Group moves around execs in wake of recent departure

Chrysler is busy shuffling executives around in the wake of Ram head Fred Diaz's departure. The automaker has named Reid Bigland (pictured, right) as Diaz's successor in the role of president and CEO of Ram, though Bigland will continue his duties as the head of US sales and the president and CEO of Chrysler Canada. Bigland first came to Chrysler in 2006 from Freightliner Custom Chassis Corporation, so the guy knows a thing or two about trucks.
Meanwhile, Timothy Kuniskis will take over as president and CEO of Dodge. Previously, he served as the head of Fiat in North America and has been with Chrysler in one capacity or another since 1992. His old title now falls to Jason Stoicevich, who will also continue to work as the director of the automaker's California Business Center. Finally, Bruno Cattori will take over as the president and CEO of Chrysler Mexico.
Diaz left his position to take over as a divisional vice president of sales and marketing with Nissan. You can read the full press release on the Chrysler personnel changes below for more information.