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FCA: PSA deal terms still intact despite dividend cut report

MILAN - Fiat Chrysler (FCA) said the terms of its merger with France's PSA had not changed after an Italian newspaper report that it was looking to spin off assets to reduce a planned 5.5 billion euro ($6.2 billion) cash pay-out to its shareholders. FCA said on Friday that it was sticking to the deal agreed with PSA in December before the coronavirus crisis hit demand for cars. "The structure and terms of the merger are agreed and remain unchanged," a spokesman for the Italian-American automaker said. FCA and PSA plan to finalise their merger by the first quarter of next year. PSA declined to comment. Italian business newspaper Il Sole 24 Ore said that FCA could conserve cash by reducing the special dividend, possibly by handing shareholders assets as compensation. Il Sole reported that talks were at a very early stage and no decision had been taken, adding the that aim was to keep the 5.5 billion euro value of the special dividend but to turn its "nature" from cash to assets. FCA, has just agreed a 6.3 billion euro state-backed loan to help its Italian unit and the whole country's automotive industry to weather the crisis. Although this does not bar FCA from paying the dividend, as it is not due until 2021 and would be paid by Dutch parent company Fiat Chrysler Automobiles NV, Italian politicians have called into question such a large cash pay-out. Options being considered include spinning off the Sevel van business, a 50-50 joint venture between the two groups, or FCA's Alfa Romeo and Maserati brands, Il Sole said. Sevel, which produces vans in Atessa's plant in central Italy, Europe's largest van assembly facility, could be valued between 2.5 and 3 billion euro, Il Sole said. Its spin-off to FCA shareholders could also help address European Union concerns about the merger's consequences on competition in the van segment. This option looks however complicated, Il Sole said, as it would require PSA transferring its 50% stake in Sevel to FCA. Another option is scrapping a planned spin-off of PSA's controlling stake in parts maker Faurecia, Il Sole said. A source close to the matter said that PSA could instead sell its Faurecia stake before the merger and keep the cash proceeds of the sale within the new merged company. ($1 = 0.8899 euros; additional reporting by Sarah White in Paris; editing by Alexander Smith)

Michigan Gov. Gretchen Whitmer says manufacturing can reopen May 11

Michigan Governor Gretchen Whitmer on Thursday said the state's factories can reopen next Monday, May 11, removing one of the last major obstacles to North American automakers bringing thousands of laid-off employees back to work amid the coronavirus pandemic. While reopening the manufacturing sector, Whitmer also extended her state's stay-at-home order by about two weeks to May 28, citing a desire to avoid a second wave of COVID-19, the respiratory illness caused by the novel coronavirus. “WeÂ’re not out of the woods yet, but this is an important step forward," Whitmer said in a statement. "As we continue to phase in sectors of our economy, I will keep working around the clock to ensure our businesses adopt best practices to protect workers." This week, General Motors and Fiat Chrysler Automobiles said they were targeting resuming vehicle production in North America on May 18, but suppliers would need time to prepare ahead for that date. Ford has not said what date it is targeting. The governor previously extended the state's coronavirus stay-at-home order through May 15, but had lifted restrictions for some businesses. Neighboring Ohio had allowed manufacturing to resume this past Monday, putting pressure on Whitmer to follow suit. Michigan's shutdown had stymied efforts by the Detroit Three and rival automakers to restart vehicle assembly anywhere in the United States, because so many critical parts suppliers are based in the state. Automakers and their suppliers already have begun gearing up for a possible resumption of work at their U.S. plants, but needed the official go-ahead from Whitmer. Industry officials had been pressing Whitmer to allow suppliers to reopen starting May 11 so the automakers could resume operations on their target date. They also wanted the green light so they can press Mexico to open its auto sector as suppliers there are also critical for the industry restart. The automakers' plans were tacitly approved on Tuesday by the United Auto Workers union, which represents the Detroit automakers' hourly U.S. plant workers. The union had previously said early May was "too soon and too risky" to restart manufacturing. Under Whitmer's new order, factories must adopt measures to protect workers, including daily entry screening, no-touch temperature screening as soon as possible and use of protective gear like face masks. Automakers have already rolled out such policies.

Fiat: Ready For Action

Leave it to Fiat to employ a certain little blue pill in its 2015 Super Bowl advertising. The company employed a Viagra-like medication to highlight its all-new 500X soft-roader, a larger, all-wheel-drive variant of the cute-as-a-button 500 hatchback. It's not until the end of the ad that you realize just what the advertisement is for, but once you get to the car, you're sure to get a chuckle.