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Fiat Chrysler, Peugeot owner PSA reportedly in merger talks

Fiat Chrysler and Peugeot owner PSA are in talks to combine in a deal that could create a $50 billion automaker, the Wall Street Journal reported on Tuesday, citing sources. The deal could be in the form of an all-stock deal, the report said. Fiat Chrysler shares rose sharply after the report and were up more than 7% in late afternoon trading. Fiat Chrysler and Peugeot had no comment. Investors have speculated for several years that Fiat Chrysler was hunting for a merger partner, encouraged by the rhetoric of the company's late chief executive, Sergio Marchionne. In 2015, Marchionne outlined the case for consolidation of the auto industry, and tried unsuccessfully to interest General Motors in a deal. Peugeot and Fiat Chrysler had discussed a combination earlier this year, before Fiat Chrysler proposed a $35 billion merger with French automaker Renault SA. Fiat Chrysler Chairman John Elkann broke off talks with Renault in June after French government officials intervened, and pushed for Renault to first resolve tensions with its Japanese alliance partner, Nissan. Following the collapse of the Renault merger plan, Fiat Chrysler CEO Mike Manley left the door open for talks with would-be partners, but said the Italian-American automaker could go it alone despite mounting costs to develop electric vehicles and comply with tougher emissions rules in Europe, the United States and China. Peugeot CEO Carlos Tavares dismissed the idea of a combination with Fiat Chrysler during a discussion with reporters at the Frankfurt auto show last month. "We don't need it," Tavares said when asked whether he was still interested in a deal with Fiat Chrysler. Fiat Chrysler has a commercial vehicle partnership with Peugeot.

Marchionne on Alfa's US return, Dodge Dart's powertrain weakness and minivan plans

As a reporter covering an auto show, the one opportunity you never want to miss is going to the Sergio Marchionne press briefing.
"This undertaking to bring Alfa back is a one-shot deal... We are not going to do this twice."
There just aren't that many real characters left in the auto industry. Marchionne, who sits atop both Chrysler and Fiat, is not only one of the smartest execs in the business, but also the most frank. Herein, a sample of the quotable always-sweatered executive:

Government Ending Jeep Investigation

The government is closing its investigation into older-model Jeeps with fuel tanks that could rupture and cause fires. The National Highway Traffic Safety Administration said Friday it has "no reservations" with Chrysler Group's plans to recall the vehicles. The agency is expected to release a report on its investigation in a few weeks. The decision ends an unusually public struggle between Chrysler and NHTSA. The agency asked Chrysler to recall 2.7 million Jeeps last June, contending that their gas tanks - which are positioned behind the rear axle - were at risk of rupturing and catching fire in rear-end crashes. Involved were Grand Cherokee SUVs from the 1993 to 2004 model years and Liberty SUVs from 2002 to 2007. Chrysler initially refused to recall the vehicles. The company said the rate of fuel leaks and fires after crashes was similar to comparable vehicles that were sold during the time in question. It was the first time in two years that an automaker had refused NHTSA's request for a recall. Chrysler later agreed to recall 1.56 million of the Jeeps and install trailer hitches on them to help protect the gas tanks. The company sent notices to the remaining customers saying their vehicles were fine if they have factory-installed or Chrysler-made trailer hitches. NHTSA said late Friday that it has been in close contact with Chrysler and will monitor the recall as it continues. Chrysler has told customers that it will start installing the hitches soon. "Consumers should have their vehicles serviced promptly once they receive final notification from Chrysler,"NHTSA said in a statement. In its own statement Friday, Chrysler said, "We share NHTSA's commitment to safety." NHTSA's outgoing chief, David Strickland, told The Associated Press in an interview last month that Chrysler had convinced NHTSA that the Jeeps were no more dangerous than similar vehicles sold at that time. "Those vehicles performed at a rate similar to their peers. That is the keystone analysis as to whether something poses an unreasonable risk to safety," Strickland said. Friday was Strickland's last day at NHTSA. He is joining Venable, a law firm. NHTSA began investigating the Jeeps at the request of the Center for Auto Safety, a Washington-based advocacy group. "It is tragic that NHTSA approved Chrysler's sham trailer hitch recall for Jeeps that explode in rear impacts," the Center for Auto Safety's director, Clarence Ditlow, said Friday.