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Fiat Chrysler, Peugeot announce merger as world's No. 4 carmaker

MILAN  — Fiat Chrysler and France's PSA Peugeot said Thursday they have agreed to merge to create the world's fourth-largest automaker with enough scale to confront big shifts in the industry, including a race to develop electric cars and driverless technologies. Italian-American Fiat Chrysler brings with it a strong footprint in North America, where it makes at least two-thirds of its profits, while Peugeot is the No. 2 automaker in Europe. Both lag in China, however, despite the participation of Peugeot's Chinese shareholder, Dongfeng, and are playing catching up in developing electric vehicles. Fiat Chrysler shares were trading up 9% at 14 euros in Milan, while PSA Peugeot shares were down 3.2% to 22.84 euros. The 50-50 merger is expected to offer savings of 3.7 billion euros ($4 billion), which the automakers expect to achieve without any factory closures — a concern of unions in both France and Italy where the carmakers have more overlap. Fiat Chrysler's strongest brands are Jeep SUVs and Ram trucks and it is focusing on relaunching its premium and luxury brands, Alfa Romeo and Maserati, with a focus on hybrid engines. It still makes smaller cars under the Fiat marquee, mostly for the European and Latin American markets. PSA Peugeot makes mostly small, city-friendly cars, family sedans and SUVs under the nameplates of Peugeot, Citroen and Germany-based Opel, which it bought in 2017. That is where the companies can expect to have the most overlap. The new company would be worth $50 billion, with revenue of 170 billion euros ($189 billion). It would produce 8.7 million cars a year — still behind Toyota, Volkswagen and the Renault-Nissan alliance, which make over 10 million each. Once a merger is finalized, PSA Peugeot CEO Carlos Tavares will be chief executive of the new company, with Fiat Chrysler Chairman John Elkann becoming chairman. Fiat Chrysler CEO Mike Manley will have a senior executive role. "This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity," Tavares said in a statement. Manley called it "an industry-changing combination," and noted the long history of cooperation with Peugeot in industrial vehicles in Europe. The 11-member board will be made up of five members from each company plus Tavares, who is locked in as CEO for five years.

FCA recalls 1.1 million vehicles worldwide due to confusing shifter

Fiat Chrysler is recalling 1.1 million vehicles worldwide to address the problematic shifter used on cars with eight-speed automatic transmissions. The issue is that the console-mounted shifter acts like a rocker switch and always returns to the middle position after moved. This has been deemed confusing to drivers – confusing enough to cause some to exit their vehicles without first selecting Park and leading to the car rolling away. FCA says 41 injuries are related to the shifter problem, and no evidence of equipment failure has been found. The company will enhance warning chimes and alter the shift strategy, meaning alert messages will be displayed in case the driver door is opened while the engine is running. With the door open, the transmission will prevent the car from moving even if Park is not selected. The affected vehicles are certain model-year 2012–2014 Dodge Charger and Chrysler 300 sedans, as well as model-year 2014–2015 Jeep Grand Cherokee SUVs, an estimated 811,586 US vehicles in total. The recall also affects 52,144 vehicles in Canada, 16,805 in Mexico, and 248,667 vehicles elsewhere. The shifter is used with ZF-designed and ZF-built eight-speed automatic; Audi uses a similar shifter setup in some of its vehicles, including the current-generation, which predated Chrysler's use of it. Chrysler uses a different, a rotating-dial-type shifter on eight-speed-equipped Rams. The company moved away from the problem shifter design in 2015 for the Charger and 300, and the Grand Cherokee's shift lever was modified for 2016. Owners of affected vehicles will be notified of the recall when service is available. Fiat Chrysler urges customers to follow the instructions in the vehicle's owner's manual in the meantime. Related Video: News Source: FCAImage Credit: AOL Recalls Chrysler Dodge Jeep RAM Ownership Safety SUV Sedan

Germany threatens to ban FCA vehicles over diesel emissions dispute

Germany is threatening to ban sales of FCA products over diesel emissions. According to the newspaper Bild Am Sonntag, Germany's Federal Motor Transport Authority found evidence of a so-called defeat device that shuts down certain emissions controls after running for 22 minutes. A standard diesel emissions test in the European Union reportedly takes 20 minutes to complete. FCA denies the allegations. "We believe all our vehicles respect EU emissions standards and we believe Italian regulators are the competent authority to evaluate this," the company said in a statement. The latter part of that statement drew ire from German authorities, especially after FCA declined to meet with German transport minister Alexander Dobrindt to discuss the issue. Graziano Delrio, the Italian Minister of Infrastructure and Transport, vowed to work with German authorities on behalf of FCA. According to EU law, FCA is required to homologate its vehicles in Italy because that's where its regional operations are based. When will the diesel-scented soap opera end? We wish we knew, but our Magic 8 Ball is covered in soot. Related Video: News Source: Financial TimesImage Credit: Giuseppe Aresu/Bloomberg via Getty Government/Legal Green Chrysler Dodge Fiat Jeep RAM Emissions Diesel Vehicles FCA