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Merged PSA and Fiat would retain all brands, Tavares says

By Elisa Anzolin and Gilles Guillaume PARIS/TURIN, Italy (Reuters) - Peugeot maker PSA Group and Fiat Chrysler would retain all of their car brands if their planned $50 billion merger goes ahead, the would-be chief executive of the combined group said on Friday. PSA CEO Carlos Tavares, seen as the architect of PSA's turnaround and in line to take the operational helm in the Fiat tie-up, said in a TV interview that the companies complemented each other well geographically and in terms of technology and brands. FCA derives 66% of its revenue from North America compared with only 5.7% for PSA, Refinitiv Eikon data shows. Europe remains the main revenue driver for PSA. "There's no doubt it's a very good deal for both parties. It's a win-win," Tavares told France's BFM Business, in his first interview since the French and Italian companies announced plans to create the world's fourth-largest auto maker last week. Fiat Chrysler (FCA) Chairman John Elkann, who would chair the combined group, said on Friday at an event in Turin that the 50-50 share merger would help the Italian carmaker "seize great opportunities." The deal, which would help the firms pool resources to meet tough new emissions rules and investments in electric and self-driving vehicles, as well as counter a broader downturn in car markers, is still at an early stage. PSA and Fiat have said they aim to reach a binding outline in the coming weeks, but still face questions over potential job losses, as well as scrutiny over whether the transaction favors one party more than the other. Tavares said the brands that would come under the combined group's umbrella — PSA's five passenger car nameplates include Citroen, Vauxhall and Opel, while FCA has nine, including Fiat, Alfa Romeo, Maserati, Chrysler, Dodge and Jeep — were all likely to survive. "As of today, I don't see any need to scrap any of the brands if the deal came to pass. They all have their history and their strengths," Tavares said. Few carmakers have as large a portfolio, with German rival Volkswagen Group counting 10 passenger brands, if newer Chinese ones such as electric vehicle label Sihao are included. The merger will also require approval from anti-trust authorities. Tavares said he did not expect the companies to have to make major concessions to meet competition rules, but added they were ready to do so, without giving details.

Strike looms for FCA workers as soon as Wednesday night

A strike is on the very near horizon for at least some United Auto Workers members at FCA US. On October 6, the union sent a letter to the automaker that officially announced the termination of its agreements with the company as of 11:59 PM on Wednesday, October 7. Assuming that a deal or extension hasn't happened by that time, workers could hit the picket line. While neither side is talking much publicly, it does appear that negotiations are still underway. In a very brief statement, the automaker simply says: "FCA US confirms that it has received strike notification from the UAW. The Company continues to work with the UAW in a constructive manner to reach a new agreement." The UAW seems equally receptive, and it says in a post on Facebook: "Negotiations with FCA continue. Your bargaining team is hard at work and we will continue to post updates when there is more to report." If a strike happens, it could put a serious financial burden on FCA US. Economist Sean McAlinden from the Center for Automotive Research estimates the cost at as much as $40 million per week, according to Reuters. The union hasn't clarified at this time whether all of its workers with the automaker would stop working or if the picket lines would only be at specific plants. The first tentative agreement posted to UAW members working with FCA US utterly failed in voting. Raises and a healthcare co-op would have been among the new benefits. However, the employees were upset that the proposed deal retained a two-tier wage structure, and they also didn't like the lack of details about rumors of major production changes.

Former Treasury boss unaware auto task force fired GM's Wagoner

We dig a good political tell-all every once in a while (how else will we get our political fix while waiting for House of Cards' third season?). Today, we get just that from former Treasury Secretary Timothy Geithner's new book, "Stress Test," which details, among other parts of the 2009 financial catastrophe, the structured bankruptcy that allowed Chrysler and General Motors to emerge as competitive players in the auto industry.
In the book, which is nicely recapped by The Detroit News, Geithner discusses the firing of GM CEO Rick Wagoner while explaining how much trust he had in the auto industry task force that executed the move without his knowledge.
Auto Czar Steve Rattner "didn't even consult me before he fired General Motors CEO Rick Wagoner; if anything, that move increased my confidence in Team Auto," Geithner wrote.