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Stellantis not looking for further mergers, including with Renault

MILAN — Stellantis Chairman John Elkann on Monday denied the carmaker was hatching merger plans, responding to press speculation about a possible French-led tie-up with rival Renault. Elkann said that the Peugeot owner, the world's third largest carmaker by sales, was focused on the execution of its long-term business plan. "There is no plan under consideration regarding merger operations with other manufacturers," said Elkann, who also heads Exor, the Agnelli family holding company that is the largest single shareholder in Stellantis. After abandoning the Russian market, at the time its second largest after France, and reducing the scope of its global cooperation with Nissan, Renault has been seen as a potential M&A target. Speculation intensified after an electric vehicle market slowdown forced it last week to cancel IPO plans for its EV and software unit Ampere. Its market cap remains stubbornly low at little over 10 billion euros ($10.8 billion) despite a financial recovery over the past few years. Stellantis, the product of a 2021 merger between France's PSA and Fiat Chrysler and one of the most profitable groups in the industry, has a market cap of more than 85 billion euros when unlisted shares are factored in. It has a 14 brand portfolio also including Citroen, Jeep, Opel and Alfa Romeo. NEWSPAPER REPORT Italian daily Il Messaggero had said on Sunday that the French government, which is Renault's largest shareholder and also has a stake in Stellantis, was studying plans for a merger between the two groups. A spokeswoman for Renault said on Monday the group did not comment on rumors. France's Finance Ministry had declined to comment on Sunday. Stellantis has crossed swords with the Italian government, which has accused it of acting against the national interest on occasions. Industry Minister Adolfo Urso last week raised the prospect of the Italian government taking a stake in Stellantis to help to balance the French influence. Renault shares pared gains after Elkann's comments to stand 1.2% higher by 1220 GMT, having initially risen more than 4%. Stellantis CEO Carlos Tavares, a Portuguese-national, last week said in an interview with Bloomberg that the group was "ready for any kind of consolidation" and that its job was to make sure that it would be "one of the winners". Analysts, however, question the rationale of a Stellantis-Renault merger, which would also expand the group's excess capacity in Europe.

FCA recalls 2 million Ram trucks over airbag issues

Airbag issues have prompted Fiat Chrysler Automobiles to issue another pair of recalls. The two separate issues both affect Ram pickups, one campaign stemming from oversensitive sensors, the other from a wiring harness. Between them, the problems affect an estimated combined total of some 2 million units. The first recall affects 2013-15 Ram 1500, 2500, and 3500 trucks, specifically four-door models, manufactured between June 20, 2012, and January 26, 2015. The calibration of the side impact sensor in those affected units may to be too sensitive. As a result, if the door is slammed too hard, the side-curtain airbag and seatbelt pre-tensioner may inadvertently activate. FCA reports that this issue affects an estimated 667,406 units in the United States, plus 153,011 in Canada, a further 8,272 in Mexico, and another 14,847 in markets outside of North America, amounting (in Chrysler's estimation) to less than 0.005 percent of those vehicles produced. The automaker says it is aware of two minor injuries (but no accidents) that may have resulted from the glitch, and is taking action to have the Occupant Restraint Control module recalibrated in the affected units. The second issue also affects Ram pickups, including 1500, 2500, 3500, 4500, and 5500-series models from the 2012 to 2014 model years, built between January 18, 2011, and October 7, 2014, and fitted with the optional Electronic Vehicle Information Center. The problem here stems from a wiring harness in the steering wheel that may rub against a retainer spring in the air bag control module, which in turn could cause an electrical short and deploy the driver's side air bag unexpectedly. In the United States alone, the issue is estimated to affect 1,060,531 units, which will need to be inspected and, where necessary, have their steering wheel wiring harnesses secured, with protective caps added to the ends of the airbag retainer spring. These do not represent the first issues we've seen from Fiat Chrysler in recent days. The automaker recently issued a recall for approximately 1.4 million vehicles to have their Uconnect software updated to prevent hacking. A few days ago it also announced a recall for 350,000 Dodge Journey (and Fiat Freemont) crossovers to secure loose engine covers. And the National Highway Traffic Safety Administration is expected to issue Fiat Chrysler Automobiles a $105-million fine for mishandling other recent recalls and safety issues.

The Chrysler brand could be axed under Stellantis management

MILAN — While running NissanÂ’s North American operations from 2009 to 2011, Carlos Tavares had a reputation for closely watching costs with little tolerance for vehicles or ventures that didnÂ’t make money. Experts say that means Tavares, currently the head of PSA Group, is likely to follow that blueprint when he becomes leader of a merged PSA and Fiat Chrysler Automobiles. The low-performing Chrysler brand might get the axe as could slow-selling cars, SUVs or trucks that lack potential. Already the companies are talking about consolidating vehicle platforms — the underpinnings and powertrains — to save billions in engineering and manufacturing costs. That could mean job losses in Italy, Germany and Michigan as PSA Peugeot technology is integrated into North American and Italian vehicles. “You canÂ’t be cost efficient if you keep the entire scale of both companies,” said Karl Brauer, executive analyst for the iSeeCars.com auto website. “WeÂ’ve seen this show before, and weÂ’re going to see it again where they economize these platforms across continents, across multiple markets.” Shareholders of both companies are to meet Monday to vote on the merger to form the worldÂ’s fourth-largest automaker, to be called Stellantis. The deal received EU regulatory approval just before Christmas. Tavares, who for years has wanted to sell PSA vehicles in the U.S., wonÂ’t take full control of the merged companies until the end of January at the earliest. He likely will target Europe for consolidation first, because thatÂ’s where Fiat vehicles overlap extensively with PSAÂ’s, said IHS Markit Principal Auto Analyst Stephanie Brinley. Europe has been a money-loser for FCA, and factories in Italy are operating way below capacity — a concern for unions, given FiatÂ’s role as the largest private sector employer in the country. “We are at a crossroads,Â’Â’ said Michele De Palma of the FIOM CGIL metalworkersÂ’ union. “Either there is a relaunch, or there is a slow agonizing closure of industry, in particular the auto industry, in Italy.” ItalyÂ’s hopes lie with the luxury Maserati and sporty Alfa Romeo brands, but De Palma said investments are needed to bring hybrid and electric technology up to speed. FiatÂ’s Italian capacity stands at 1.5 million vehicles, but only a few hundred thousand are being produced each year. Most factories were on rolling short-term layoffs due to lack of demand, even before the pandemic.