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Nissan tells Renault it is 'not opposed' to Fiat Chrysler merger plan

TOKYO – Nissan on Wednesday told Renault it wasn't opposed to its partner's potential $35 billion merger with Fiat Chrysler, the Nikkei newspaper said, as the two met to hash out the future of their alliance amid a deal that could upend the auto industry. The leaders of Nissan Motor Co, France's Renault SA and junior partner Mitsubishi Motors Corp gathered at Nissan's headquarters in Yokohama for a scheduled alliance meeting - one overshadowed by Fiat Chrysler's proposal this week for a merger-of-equals with Renault. The plan, which would create the world's third-largest automaker, raises difficult questions about how Nissan would fit into a radically changed alliance. Renault Chairman Jean-Dominique Senard arrived in Japan on Tuesday to discuss the proposed tie-up with Nissan, 43.4% owned by the French automaker. "We are not opposed," the Nikkei quoted an unnamed Nissan source who had attended the meeting as saying. The person also said "many details need to be worked out" before the Japanese automaker solidifies its position on the issue, the Nikkei reported. In a statement, the alliance members confirmed that they had "an open and transparent discussion" on the proposal. The deal looks designed to tackle the costs of far-reaching technological and regulatory changes, including the drive toward electric vehicles. Nissan, which has rebuffed overtures by Renault for a merger of their own despite their 20-year alliance, was blindsided by the discussions, sources have told Reuters, stoking concerns that a deal with Fiat Chrysler could weaken Nissan's relations with Renault. The tie-up also poses an additional challenge for Nissan CEO Hiroto Saikawa, already grappling with poor financial performance and an uneasy relationship with Renault after Nissan led the ousting last year of long-standing alliance chairman Carlos Ghosn. There have long been tensions between Nissan and Renault over the imbalance of power in their alliance. Nissan, the bigger company, holds a 15% non-voting stake in the French automaker, while Renault owns 43.4% of Nissan. Ahead of Wednesday's meeting, Japanese media quoted Saikawa as telling reporters that he would look at the potential opportunities afforded by a Renault-FCA merger. Credit ratings agency Moody's said it was vital for Nissan to stabilize its partnership with Renault to expand operational synergies and improve margins.

Feds investigating FCA sales fraud focusing on strange code word

The US government is currently investigating Fiat Chrysler Automobiles (FCA) over the possibility of sales fraud, and according to The Wall Street Journal, the investigation has revealed a strange phrase about a nonexistent "unnatural acts department." People knowledgeable about the term told The Wall Street Journal that this phrase was a "rallying cry." Basically, if it looked like the company, region, or dealer wasn't going to hit sales targets, this was a sign that some outside-the-box sales solutions were needed. People told the news outlet those solutions could include selling cars at a loss or having the dealer buy a fleet of customer test-drive cars. However, this could also be evidence of some less savory ways to boost sales. In addition to the investigation, the company is already facing at least one lawsuit from a dealer group that alleges it would bribe dealers to pad monthly sales figures. FCA had an incentive to maintain sales numbers as well, considering that it was claiming a long streak of increasing sales. Under scrutiny recently, the company changed its sales reporting practices and numbers for previous years. Under the old reporting methods, it was possible for dealers to sell cars, report the sales, and then cancel or "unwind" the sales later. This wouldn't count as a lost sale, but the car also couldn't be recorded as another sale later. As a result, an unscrupulous dealer could have hypothetically used it to "sell" a car one month and "unwind" it the next. If FCA knew about this, it's also possible the company could have pushed dealers to use the system for false sales, something the Feds theorize may be related to the "unnatural acts department" phrase. It's still entirely possible this "unnatural acts department" was just a corporate term for thinking of creative ways to meet sales goals. And selling cars at a loss is definitely unnatural for businesses that are trying to make money. Whatever the phrase truly meant to dealers, it certainly is bizarre. Related Video: News Source: The Wall Street JournalImage Credit: GIUSEPPE CACACE/AFP/Getty Images Government/Legal Chrysler Fiat FCA fiat chrysler automobiles fca us investigation

China own a Detroit automaker? Would the U.S. let that happen?

The news that several Chinese automakers want to buy Fiat Chrysler Automobiles, and that one has even made an offer, elicits some mixed feelings. On one hand, as some have pointed out, it could be a win-win both for China and for FCA's American workers, ensuring the company's survival and opening new markets. On the other hand, this is China, whose trade relationship with the U.S. is the source of considerable scrutiny from the Trump administration — and whose not-a-friend, not-an-enemy status is particularly difficult to gauge right now during heightened tensions with its client state North Korea. So would such a deal pass regulatory muster? One reason that springs to mind for blocking any sale has to do with national security. Chrysler's role as a military supplier dates back to Dodge trucks used by Gen. Blackjack Pershing to chase Pancho Villa in Mexico, and shortly thereafter by American forces in World War I. The Detroit Three automakers were, of course, mainstays of the Arsenal of Democracy of World War II. Even before U.S. entry into the war in December 1941, America's industrial machinery went into overdrive, and Chrysler was one of the biggest cogs. It engineered and built the M3, Sherman and Pershing tanks and trucks for Gen. George Patton's Redball Express. It helped develop a radar-guided antiaircraft gun that knocked German bombers and V1 rockets out of the sky — on one day, shooting down 97 of 101 V1s headed for London. On D-Day, the radar system helped thwart Luftwaffe counterattacks on the beaches of Normandy, and it later helped Allied forces break out at the Battle of the Bulge. Chrysler redesigned the Wright Cyclone engines used by the Boeing B-29 Superfortress, the plane that firebombed Tokyo and dropped the atomic bombs that ended the war. Chrysler even played a secret role refining uranium in Oak Ridge, Tenn., that was used in the Hiroshima bomb and in the ensuing Cold War arms race. It worked on military missiles and was NASA's prime contractor for the Saturn V rocket that put men on the moon. More recently, Chrysler produced the M1 Abrams tank. And of course Chrysler is the keeper of the flame for Jeep, a 75-plus-years military legacy handed down from Bantam and Willys to Kaiser to AMC to Chrysler. The point of this history lesson is to note that in times of war or national emergency, America's industrial might has been called to serve, and may well be called on again.