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FCA and Peugeot reportedly agree on merger

Citing a Wall Street Journal report, the Detroit Free Press says "Fiat Chrysler and PSA Groupe have agreed to merge." The Journal reported on talks between the two car companies only yesterday. It's said that Peugeot's board met yesterday to approve the deal, FCA's board met today, and an announcement could come as soon as tomorrow, Thursday. Both automakers have released statements, but neither company has released any information beyond admitting to ongoing talks. If the merger happens, the combined entity would become the world's fourth-largest carmaker with a $50 billion valuation, slotting in behind Toyota, the Volkswagen Group, and the Renault Nissan Mitsubishi alliance. Among the merger options possible, "an all-stock merger of equals" is the one analysts and Moody's seem to give the best grade. The reported merger would come about four months after FCA walked away from merger talks with Renault. FCA said the French government scuppered those talks over the role of Nissan in a reformed entity, but there were also brewing issues with French unions, and ongoing turmoil among Renault and Nissan leadership thanks to continuing fallout from ex-CEO Carlos Ghosn's arrest last year. FCA makes most of its revenue in the U.S. and rules Italy, while Peugeot is the second-best-selling automaker in Europe with its own brand in France and Opel in Germany. The two companies already have a partnership in Europe making vans, one that FCA CEO Mike Manley has spoken highly of. Among the list of obvious benefits in a potential merger, FCA would get access to Peugeot's small, modern platforms, $10.2 billion in cash, and electrified and hybrid architecture developments, the latter especially important to FCA as those are fields where it lags. Peugeot would get much easier access to the U.S. market, and the money-printing brands Jeep and Ram. A merged carmaker would have combined sales of nearly 9 million a year, based on 2018 results. By comparison, both Volkswagen and Toyota sell over 10 million cars a year, while the Renault-Nissan-Mitsubishi alliance almost 11 million. Peugeot CEO Carlos Tavares has proved he knows how to do turnarounds and mergers. After leaving a position as Carlos Ghosn's right-hand man in 2012, Tavares took over Peugeot in 2014, navigated a bailout from the French government and China's Dongfeng Motors in 2015, and turned PSA into a regional powerhouse.

Towing with the 2016 Ram lineup [w/video]

I do not tow things. Ever. Yet I recently found myself at the Fiat Chrysler Automobiles proving grounds in Chelsea, MI, where I'd be testing the hauling capabilities of Ram's current product range. This experience was not only a perfect education for a towing novice like me, but allowed me to tow far more weight than I'd ever consider hauling the real world, and all within the safe confines of the Chelsea Proving Grounds. There was an extremely diverse array of vehicles at my disposal, including Ram's gasoline- and diesel-powered offerings with trucks ranging from the 1500 on up through the 5500 Chassis Cab, as well ProMaster vans. Beyond that, FCA brought out a number of vintage Dodge pickups for me to play with, while also working with Case IH to provide a track-loader I could test. I put together a range of videos covering everything from the classics to the production trucks to the construction equipment. And despite some technical difficulties – you'll notice a distinct lack of in-car videos, with blame going to a corrupted micro SD card – I've assembled ten videos that give an up-close look at Ram's offerings. 2015 Ram ProMaster City Let's start small. The ProMaster City only has a towing capacity of 2,000 pounds. That's a reasonably impressive figure for a van that uses the same powertrain as a Chrysler 200. The 2.4-liter four-cylinder and nine-speed automatic weren't really bothered with the extra weight added by the trailer. Even when accelerating at freeway speeds, the ProMaster City didn't feel out of breath or hampered by its load. That said, the rear of the van was unloaded, which probably wouldn't be the case for most consumers. It's unclear how the City would feel if its driver were taking advantage of the max payload (1,883 pounds) and towing. 2015 Ram ProMaster 1500 To be polite, the Ram ProMaster is a difficult vehicle to like. Its awkward seating position is bus-like and lacks the visibility enjoyed by the Ford Transit or the utter driving comfort of the Mercedes-Benz Sprinter. Its 3.0-liter, four-cylinder turbodiesel engine, meanwhile, is something of an anomaly. While it's potent for a four-cylinder diesel, producing 295 pound-feet of torque and 174 horsepower, those numbers don't feel all that impressive when loaded down. The model I tested was barely using half of its 5,100-pound maximum towing weight and was loaded down with just 500 of its 3,620-pound payload. Yet it lacked the pluckiness of the smaller City.

Fiat stock rockets up after word of Chrysler deal

Now that Fiat has finalized a deal to purchase the outstanding shares of Chrysler owned by the United Auto Workers' VEBA retiree heathcare fund without having to file for an IPO, you can count the Italian automaker's stockholders among the happy. The Detroit News reports that Fiat stock closed Thursday with a 12-percent gain for the day on the Borsa Italiana, having been up by as much as 15.8 percent during the day's trading, at prices not seen since mid-2011. One trader reasoned the run was because Fiat "paid less than the market had expected and there will be no capital increase to fund this."
But there are some who worry, including bank analysts and unions. The final price of the stake will be $4.35 billion - $1.9 billion in cash from Chrysler, $1.75 billion from Fiat and extraordinary dividends in the amount of $700 million paid over three years. Adding that sum to its ledger will raise Fiat's debt level to roughly 10 billion euros ($13.8 billion), which Citibank says will make it the most indebted OEM in Europe.
Italian unions are also concerned about what the deal means for the future. Fiat CEO Sergio Marchionne has had an at-times contentious relationship with both unions and the Italian government over the future of Italian manufacturing, a fact that makes headlines because Fiat is Italy's largest private employer. At least two left-leaning unions have publicly called on Fiat to give guarantees and to explain what the deal means for its Italian operations, while a centrist union argues this is "good news for Fiat workers, for the auto industry and for our country."