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Stellantis mega-merger gets approval from FCA, PSA shareholders

MILAN — Shareholders of Fiat Chrysler and PSA Peugeot decisively voted Monday to merge the U.S.-Italian and French carmakers to create worldÂ’s 4th-largest auto company. Addressing separate meetings, both PSA Peugeot CEO Carlos Tavares and Fiat Chrysler Chairman John Elkann spoke of the “historic” importance of the vote, which combines legacy car companies that helped write the industrial histories of the United States, France and Italy. Before the merger is finalized, shares in the new company, to be called Stellantis, must the launched. It will be traded in Milan, New York and Paris. The marriage of PSA Peugeot and Fiat Chrysler Automobiles is built on the promise of cost-savings in the capital-hungry industry, but what remains to be seen is if it will be able to preserve jobs and heritage brands in a global market still suffering from the pandemic. The deal will create the worldÂ’s fourth-largest carmaker, with the capacity to produce 8.7 million cars a year, behind Volkswagen, Toyota and Renault-Nissan, and create 5 billion euros in annual synergies.  “We are fully aware of the fact that together we will be stronger than individually,'' PSA CEO Carlos Tavares told a virtual gathering of eligible shareholders. “The two companies are in good health. These two companies have strong positions in their markets.” The new company will put together under one roof French mass-market carmakers Peugeot and Citroen, top-selling Jeep and Italian luxury and sports brands Maserati and Alfa Romeo - pooling companies that have helped define the industry in the United States, France and Italy. While the tie-up is billed as a merger of equals, the power advantage goes to PSA, with Tavares running Stellantis and holding the tie-breaking vote on the 11-seat board. Tavares is set to take full control of the company early this year, possibly by the end of January. Fiat Chrysler chairman John Elkann, heir to the Fiat-founding Agnelli family and Fiat ChryslerÂ’s biggest shareholder, will be the Stellantis chairman. Fiat Chrysler CEO Mike Manley will head North American operations, which is key to Tavares' long-time goal of getting a U.S. foothold for the French carmaker he has run since 2014, and the clear money-maker for Fiat Chrysler. Such a deal was long wanted by Fiat ChryslerÂ’s long-time CEO Sergio Marchionne, who had predicted the necessity of consolidation in the industry. He was unable to find a deal before his sudden death in July 2018.

FCA fibbed on sales according to internal report

Following last week's news that Fiat Chrysler Automobiles (FCA) is under investigation by the Department of Justice and Securities and Exchange Commission for allegedly fudging sales figures, a new report in Automotive News says an internal investigation at FCA uncovered misreported sales. According to the AN story, 5,000 to 6,000 vehicles from various FCA brands were reported sold by dealers, but no customers existed for those cars. FCA sales chief Reid Bigland has already put a stop to the practice. One potential reason for the practice was to maintain the company's month-to-month sales increase streak, currently at 75 months. In April, FCA added a lengthy disclaimer to its sales announcements: "FCA US reported vehicle sales represent sales of its vehicles to retail and fleet customers, as well as limited deliveries of vehicles to its officers, directors, employees and retirees. Sales from dealers to customers are reported to FCA US by dealers as sales are made on an ongoing basis through a new vehicle delivery reporting system that then compiles the reported data as of the end of each month. "Sales through dealers do not necessarily correspond to reported revenues, which are based on the sale and delivery of vehicles to the dealers. In certain limited circumstances where sales are made directly by FCA US, such sales are reported through its management reporting system." FCA did not provide comment to Automotive News. Click through for the full story and more details. Related Video: Earnings/Financials Government/Legal Chrysler Dodge Fiat Jeep RAM sales Sergio Marchionne FCA USDOJ reid bigland

Weekly Recap: Hackers demonstrate auto industry's vulnerability

There's always been a certain risk associated with driving, and this week cyber security came into focus as the latest danger zone when researchers demonstrated how easily they could hack into a 2014 Jeep Cherokee from across the country. The incident raised concerns over the vulnerability of today's cars, many of which double as smartphones and hot spots. During the now-infamous experiment, Chris Valasek and Charlie Miller infiltrated the Jeep's cellular connection and were able to control the infotainment system, brakes, and other functions. The hackers told the Jeep's maker, FCA US, of their findings last year, the company devised a software fix. Though Valesek and Miller hacked a Cherokee (like the one shown above), several FCA products, including recent versions of the Ram, Grand Cherokee, Dodge Durango, and Viper were also affected, illustrating potentially wide exposure that could reverberate across the sector. "For the auto industry, this is a very important event and shows that cyber-security protection is needed even sooner than previously planned," Egil Juliussen, senior analyst and research director for IHS Automotive, wrote in a research note. "Five years ago, the auto industry did not consider cyber security as a near-term problem. This view has changed." Hours after the Cherokee hacking incident was publicized on Tuesday, Sens. Ed Markey (D-Mass) and Richard Blumenthal (D-Conn) introduced legislation to direct the National Highway Traffic Safety Administration and Federal Trade Commission to establish national standards for automotive cyber security. The bill also would require vehicles to have a cyber-rating system to alert consumers how well their cars' privacy and security are defended. "Drivers shouldn't have to choose between being connected and being protected," Markey said in a statement. "We need clear rules of the road that protect cars from hackers and American families from data trackers." Though FCA and its Jeep Cherokee were in the spotlight this time, they were just the latest to showcase how automotive technology has advanced faster than safety and regulatory measures. IHS forecasts 82.5 million cars will be connected to the internet by 2022, which is more than three times today's level. "Cyber-security will become a major challenge for the auto industry and solutions are long overdue," Juliussen said.