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Fiat Chrysler and PSA boards sign off on merger

MILAN — The boards of French carmaker PSA, the owner of Peugeot, and Fiat Chrysler in separate meetings on Tuesday approved a binding agreement for a $50 billion merger, sources said. The two midsized carmakers announced plans six weeks ago for a tie-up to create the world's No. 4 carmaker and reshape the global industry. A merger is seen helping them deal with big challenges in the industry, including a global downturn in demand and the need to develop costly cleaner cars to meet looming anti-pollution rules. Both companies declined to comment. A source close to FCA had said earlier the two companies could formally announce the agreement early on Wednesday, followed by a conference call to explain further details later in the day. China's Dongfeng Motor Group, which now has a 12.2% equity stake in PSA, will have a reduced stake of around 4.5% in the merged group, two sources said, in a move that could help make regulatory approval easier. According to the deal approved by PSA's board on Tuesday, FCA's robot unit, Comau, will remain within the combined group rather than be spun off as was originally planned in October, the sources said. The new group will evaluate how to extract value from Comau. Ahead of the meetings, entities representing the Peugeot family, Etablissements Peugeot Freres (EPF) and FFP, unanimously approved a proposed memorandum of understanding for the planned merger, a source familiar with the situation said. FCA and PSA are expected to finalise a deal by the end of 2020 to create a group with 8.7 million annual vehicle sales, a source said. That would put it fourth globally behind Volkswagen AG, Toyota and the Renault-Nissan alliance. It was only six months ago that FCA abandoned merger talks with PSA's French rival Renault. FCA would gain access to PSA's more modern vehicle platforms, helping it meet tough new emissions rules, while Europe-focused PSA would benefit from FCA's profitable U.S. business featuring brands such as Ram and Jeep. However, the deal could still face close regulatory scrutiny, while governments in Rome, Paris and unions are all likely to be wary about potential job losses from a combined workforce of around 400,000. PSA's Carlos Tavares will be chief executive and FCA's John Elkann — the scion of Italy's Agnelli family, which controls FCA through their holding company Exor — chairman of the combined company.

Marchionne emailed Barra about merger between FCA and GM

Sergio Marchionne is adamant that global automakers will have to merge to remain profitable in the near future, and he'll tell that to anyone who's listening. Mary Barra, however, is not interested. According to The New York Times, the Fiat-Chrysler chief proposed a merger with General Motors via email to his counterpart back in March. Marchionne proposed meeting to discuss the matter, but Barra and her team reportedly rejected even entertaining the idea. This of course is not the first time Marchionne has raised the idea of a merger. He masterminded the marriage between Fiat and Chrysler, and reports have since suggested further mergers with Volkswagen, Peugeot, Ford, and others – including GM's own Opel unit. Some have taken his calls for consolidation as a weakness, but Marchionne insists that his empire is in good health – and that it's the industry as a whole which is in an untenable position. According to his view, automakers around the world need to align themselves into larger groups in order to reduce redundancy in investment, development and infrastructure – the duplication of which he terms as wasteful. "It's fundamentally immoral to allow for that waste to continue unchecked," said Marchionne to the Times. "I think it is absolutely clear that the amount of capital waste that's going on in this industry is something that certainly requires remedy," he said in a conference call with industry analysts late last month following the rejected GM approach. "A remedy in our view is through consolidation." News Source: The New York TimesImage Credit: Paul Sancya/AP Chrysler Fiat GM Sergio Marchionne merger fiat chrysler automobiles

Chrysler 'at war' with world's largest Viper club?

The situation was bound to boil over at some point. Grumblings from former and current members of the Viper Club of America, and letters sent from Chrysler to VCA president Lee Stubberfield, allege that the non-profit club is being run illegally as a for-profit business, Jalopnik reports.
The trouble reportedly started in 2007, when VCA member and former club national president Chris Marshall is alleged to have taken a paid position at the club courtesy of the acting board members at the time. By 2010, with the demise of the Dodge Viper looming, the VCA reportedly made a deal with Chrysler to to acquire a stash of old parts and tooling for the Viper. The stash would then be sold by the newly formed Viper Parts of America, a company that was supposed to be run by Marshall, Jalopnik reports.
This sounds like shady business to us - at the very least a conflict of interest. And it's said that the VCA will not hesitate to suspend - for a year or more - the memberships of those who oppose it.