1978 Chrysler Newport Coupe on 2040-cars

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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.

Baby Jeep to join Renegade in FCA's plan for new Italian-built models

FCA is boosting its European production, introducing new models that will be built in currently under-utilized manufacturing facilities. Among the new models is a new small Jeep, smaller than the current Renegade, as Automotive News reports. FCA's Mike Manley mentioned the entry-level Jeep model earlier this year, also saying that the vehicle is targeted to European and possibly Latin American customers; in the summer, Autocar placed the launch date in 2022. The new "baby" Jeep would be made in the same factory in Pomigliano, Italy, as the small Fiat Panda, which is a top seller in Italy. The current generation Panda was introduced in 2011; if it gets a replacement in 2022, it could possibly share a platform with the Jeep model — or, the Jeep could be an eventual outright replacement for the Panda. One of Fiat's earlier core products, the Punto hatchback, was canned in August, and that production capacity will be used to make the Jeep Compass instead, at the Renegade-producing Melfi factory in southern Italy. The Compass has not previously been built in Europe. The Fiat model portfolio would be shrunk to just the 500 model family and the Panda — the 500 would also be FCA's key electric vehicle offered in Europe. It is not yet clear whether the electric 500 would be made in Turin, Italy, or in Poland; Turin might also get a Giardiniera-badged wagon version of the refreshed 500. As for the Alfa Romeo brand, it is set to gain an even bigger SUV model than the Stelvio, based on the Maserati Levante's platform. The Levante's sales have suffered recently in China, but Maserati does have light in the horizon: The Alfieri 2+2 grand tourer is still in the cards, with a launch expected for 2020 and both a convertible and an electrified version planned to follow. The Alfieri would be made in Modena, Italy, according to Automotive News' sources. None of these plans namedrop the storied Lancia brand, which has been shrunk to just the Ypsilon hatchback, based on the same platform as the current 500 and Panda. Despite that, the Ypsilon was again the second-bestselling car in Italy after the Panda in October. It is unlikely that FCA will be able to ignore this, but it is just as unlikely that any development money will be afforded to come up with a replacement for the Ypsilon, which is as similarly old as the Panda. Perhaps official announcements expected on Thursday will also clarify what will happen to Lancia.

Chrysler recalling 278,222 trucks and SUVs over bad rear axles

Chrysler has issued a recall of 278,222 light trucks and sport utility vehicles here in the United States. The reason: bad rear axles. Specifically, according to the National Highway Traffic Safety Administration, the rear axle pinion nut may lack a necessary adhesive patch, which could cause the nut to loosen. If this happens, the axle can lock up, which could cause all sorts of havoc on the road.
This is an expansion of the rear axle recall announced in October of last year, where 44,300 Ram 1500 and Dodge Dakota models were being called in. At that time, 12 accidents had been reported due to the faulty axle pinion nut.
Affected vehicles include Ram 1500 trucks from the 2009 to 2012 model years, Dodge Dakota models from the 2009 to 2011 model years, and both the Chrysler Aspen and Dodge Durango SUV twins, both from the 2009 model year only.