Fiat Chrysler, PSA in merger talks, WSJ says

AlexB

Well-known member
Another Company history tie-in is Citroen & Maserati....that was the end Citroeon's independence & start of PSA.
 

TripleT

Well-known member
Actually I think that even model should be replace after 8 years. But yes, it should keep its platform and all hard points. Just look at what VW did with Golf in Europe. Golf it the best selling car in Europe.
Guys in Koln told me that beat them..... but I am sure consistently that is correct.
 

Freshforged

Active member
Peugeot and Citroen have some really interesting vehicles. It will be interesting to see how the design studio intertwine. FCA already has several of PSA Groupe vehicles in its fleet in Auburn Hills.



Argh—my eyes! Ok that’s obviously hyperbole, but I do have to say from a design perspective this is a solution is search of a problem: otherwise clean lines are broken up by swaths of discordant shape/texture. Rather than create a harmony It creates chaos. i understand this is not intended for American consumption, but I hope they keep the stylists away from my beloved Mopa.
 

Freshforged

Active member
shocked, just shocked

did not think Agnelli family would be ok with holding<50% of combined company. I guess so long as they maintain greater representation than Peugeot family their ok with the situation, but that was not my expectation AT ALL. Not sure what technology they bring other than pre-existing plans for massive investment into battery production—backend stuff fro use in FCAs (superior?) platform portfolio?
 

Deckard Cain

Active member
By merging with FCA I don't think that they will bring Peugeot and Citroen to the US. What's the point now that they have the third biggest autogroup in the North American market?
I'm curious to see what Tavares will bring to the table for the american brands. In Europe he always wanted to build economies of scale by building cars that share the same underpinnings (engines, platform) but that didn't dilute their identity. In fact they really focused on making the brands very different from each other by using the qualitites that defined them historically. This was really great for Opel and Citroen.

For example:
- In the B-segment the C3, the (old) 208 shared the platform. They are wildly different from each other and the C3 is a really fun and quirky car but its more tuned for confort. THey bet heavily on the quirky design, used plastic cladding, and a lot of interesting material choices on the interior to make the car different from everything else in the segment. It's tuned for confort, and the interior while still cheap doesn't feel like it as the (old) Renault Clio did for example. It's been the most successful launch from Citroen in a long time.

- The new Peugeot 208 and Corsa share the exact same underpinnings. They developed the Corsa in 18 months. Even if it mostly has french underpinnings, it feels like an Opel. The design language is the same. Opel always had a generic, innofensive design. They're an appliance brand, but with elegant appliances (opposed to VW's square appliances). Usually they have a harder suspension tuning and more responsive steering than the french models. My daily driver is an Opel.
The important thing here is that I see them launching a new Punto sharing components with a new C3. The Centoventi concept was highly conceptual. I can see them make a cheap B-segment car based on the Centoventi that shares the platform with a new Citroen C3.

- Then we have the C3 Aircross, the Opel Crossland and Peugeot 2008. These cars all look and feel different. The Opel Crossland was made with the specific intention of replacing the Opel Mokka. It's not a great improvement and you can see it was clearly rushed to decrease payments to GM. The new 2008 shares a platform with the 208 and Corsa.

- The Peugeot 3008/5008, Citroen C5 Aircross and Opel Grandland X. These are the Compact-SUV trios. They might not be anything special underneath but boy do they look nice and have quality interiors. The 3008/5008 are even competing for sales strongly with the VW group offerings. The C5 Aircross really feels like something out of left field and different from everything else in the market and the Grandland has that curvy but innofensive design of Opels as opposed to the more busy Peugeots and alien Citroen. The perfect competitor for VW in the german and english market.

That's something that is wildly different from the way that FCA manages their brand. They always seemed to be terrified of having duplicated products that occupy the same segment.
This is how Tavares builds economies of scale: make multiple products in the same segment for different brands. While they use the same platforms and engines, PSA uses design, material choices and tuning to make the cars feel a lot more different than what they actually are.
If he decides to implement this philosophy in the US, it will be a clear shift for the american brands. Suddenly, I can see Dodge and Chrysler brothers to the Jeep Compass and Cherokee. I can see Tavares wanting to launch a new Chrysler 300 to build economies of scale with a new Charger and Challenger. He will probably be interested in launching Chrysler and Dodge midsize sedans in the same platform as the 508.
And these won't be diluted models. They'll really draw inspiration from the history of the brands to differentiate the brands. Probably Chrysler will be more confort oriented and Dodge will keep its sporty feel.
I can see him launch compact sedans and even hatches for these brands (new Dart?). Why? To build economies of scale with the new 308 and Citroen C4. At least in purchase orders from suppliers.

For Europe, I don't think this will change the plans already set in motion by FCA (the electric 500, the Tonale, the electrification of the Panda) nor it will lead to discontinued products.
What I think will happen is that a lot of products that were shelved because of lack of capital will happen with shared production at PSA sites. I wouldn't be surprised if Tavares wants to make a new Giulietta to dilute costs of the new 308 and Citroen C4. Or even a new Lancia Delta (rebadge Astra?) for that matter.
I wouldn't even be surprised if he launched a new Fiat compact SUV in the same platform as the 3008 and C5 Aircross. So many doors opened up for new product not only because of the money available but because of Tavares management philosophy. He's an aggressive cost cutter like Marchionne was but he truly understands brand and product management as well.

I wouldn't be surprised at all to see this new group becoming the most profitable in the world in 10 years, and the group that moves the most product.
 
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Bili

Official Pilot
Staff member
The proposed merger is clearly to solve EMEA region issues.

Fiat Chrysler Automobiles N.V. (FCAU) CEO Mike Manley on Q3 2019 Results - Earnings Call Transcript

Mike Manley:
Now the third issue that I think we have got is the historic underutilization of our European plants. And although much work has already been done to change this profile with the localization of Jeep and some of the investments in Alfa, this work will be completed as our current plans and future product cadence will enable us to progressively reach full manpower utilization by 2022. And in the meantime and as you can see on this page, the restructuring actions we have started the beginning of this year are now yielding results and this will remain a constant focus for the EMEA team going forward. I do just want to say that these issues in EMEA will get fixed with or without a merger. But resolution will be considerably enhanced both from a speed and a cost perspective in the proposed merger announced this morning.
 

Blown7

Active member
I deal with financial investors worth multi billions every day as a aircraft manager.. who manages their fleet.....

I can tell you........ when people live at that level their minds do not operate on the same level of most of the forum members (including myself)

There are bigger issues at play that I sure than no one commenting here can fathom.. or even wrap our minds around....

For the Tier 1 people (The One per centers) ..... they have this all figured out to benefit everyone and themselves first.

We can speculate all day on their plans.......... but I'll tell you they probably aren't close to some opinions offered here.
 

Bili

Official Pilot
Staff member
BLOG: FCA-PSA merger and what does it mean for FCA

Both FCA and PSA are agreed on major merger terms and they only need to negotiate some details which should be just a little more than a formality.

Now it’s the question what it brings to FCA. First of all combined business should save €3.7 billion per year. That’s a lot of money and 80% of that should come in just 3 years without plant closing and without platform sharing. Combined company will have such high volumes that they will buy parts at lower price.

Platform sharing is not expected in the near future. Plans laid out for the next 2 or 3 years should stay in tact.

What’s FCA gaining directly from PSA? If you ask me not much in terms of platforms. PSA doesn’t have a dedicated BEV platform which FCA launch with an all new electric Fiat 500. PSA doesn’t have modern platform which FCA have with the Giorgio, used on the Alfa Romeo Giulia and Stelvio. PSA even doesn’t have platform with mechanical AWD system which FCA have in Small Wide and which is used on many products and which will be updated for the upcoming Alfa Tonale. PSA even doesn’t have 2 litre petrol engine’s not to mention 6 cylinder ones.

So here I can see a lot of technology which can be transferred from FCA to PSA.

So what will FCA gain?

Much better sales and service presence in French and German markets. That should help Fiat but especially Alfa Romeo brand.

Fiat could launch a new Punto or a 600 or even a proper B segment crossover while pushing next generation 500X slightly higher to take on VW T-Roc. So Fiat brand could benefit from using PSA’s CMP (Common Modular Platform).

In any case FWD models from a new group will take advantage of a larger scale in Europe with higher utilization of the Italian factories. More savings could be achieved through closing German(Opel factories). German labour is the most expansive while it’s easier to lay off workers in Germany than in France or Italy. It’s only a question will Germany allow this outcome.

I don’t see much space for improvement of a North American FCA business. North American factories are highly utilized and they like big vehicles and big engines. It’ also a heavily profitable region for FCA. So I’m expecting that they will keep business as usual with addition of more BOF based and Giorgio based models.

They may opt for importing some FWD cars from Europe but as I’ve mentioned earlier Peugeot doesn’t have petrol engine bigger than 1.6 litres and doesn’t have AWD systems and both are crucial selling points in North America.

In Latin American namely Brazil which is FCA’s stronghold they will keep business as usual.

Alfa Romeo and Maserati plans should stay in tact with probable addition of more models. PSA doesn’t have such prestigious car brands so we should not worry about Alfa’s and especially about Maserati’s fate.

The major goal of this merger will be achieved with common development of electrified and electric cars together with autonomous technology. Merger will save a lot of money to reach these goals.

BLOG: FCA-PSA merger and what does it mean for FCA - EnzariEnzari
 

Muther

Active member
@Muther Even if Peugeot doesn't have the same motorsports lineup that Renault currently does, they do have some brilliant hot hatches and some expertise in that area. IMHO this is still looking like a fairly good merger from an enthusiast perspective. What're your thoughts?

Also: New Dodge SRT-4 model when???
From the perspective of a motorsports enthusiast, the Renault FCA merger was pretty darn awesome.

Ralph complained that they just didn’t h e the platform, nor the engine, for a suitable SRT4 successor. “The Sergio” also said they didn’t have the ability to make a profitable sedan/coupe/hatch in the US.

It would certainly seem to me that a Peugeot 205 given the NAFTA treatment would be an excellent place for Ralph and the SRT crazies to start. I mean, can you imagine what they’d come up with? Slip the nine speed, with flappy paddles in, connect it to a nice throaty version of the Hurricane 4 (I’m thinking 385-400hp—this is SRT after all), and give it some nice adjustable bouncy bits. Then put the Viper X-wing and splitter on it, and add on some garish fender flares.
I’d buy it. Make it SCCA stock sedan legal. That’d really tick off those Honda’s and Nissans boys.

The big question is would they import the 205, as a Dodge?
 

mopar22

Active member
Ralph complained that they just didn’t h e the platform, nor the engine, for a suitable SRT4 successor. “The Sergio” also said they didn’t have the ability to make a profitable sedan/coupe/hatch in the US.
They had the perfect platform, dart platform would have been perfect if they still had the car around since the 200 had an awd option the dart could have had one easily too. The engine side of it came years too late. The 2.0t would have most likely been the engine of choice for that and would have worked great
 

Bili

Official Pilot
Staff member
From PSA press release:

Prior to the completion of the transaction, FCA would distribute to its shareholders a special dividend of €5.5 billion, as well as its shareholding in Comau. In addition, prior to completion, Peugeot would distribute to its shareholders its 46% stake in Faurecia. This would enable the combined groups’ shareholders to equally share in the synergies and benefits that would flow from a merger while recognizing the significant value of FCA’s differentiated platform in North America and strong position in Latin America, including its market-leading margins in those regions. It would also reflect the added value that FCA’s higher-end global brands Alfa Romeo and Maserati would bring given their substantial development potential.
 

pumadog

Member
I think this was already in the shared FCA-PSA press release. Would be nice if that "substantial development potential" was invested in properly, finally, with a long term strategy.
 

Deckard Cain

Active member
They had the perfect platform, dart platform would have been perfect if they still had the car around since the 200 had an awd option the dart could have had one easily too. The engine side of it came years too late. The 2.0t would have most likely been the engine of choice for that and would have worked great
They still have the Dart platform. It's the same as the Cherokee platform.
 

DodgeFL

Member
Amazing ? I'm hearing the same buzz words [ economics of scale ] that floated about in 1998 when Daimler and Chrysler had a "merging of equals", LOL ! It didn't take long to figure out that Daimler bought out the bigger Chrysler Corporation ! And all the rosy talk was well just that . Electric cars that no one really wants except the vocal few. If you are stll working for FCA or drawing a pension, BEWARE ! The goal here with PSA is saving $$ by any means necessary.

From the Detroit News Nov.05 2019 quote below:
" Fiat Chrysler under the proposed combination would surrender majority control of the new company's board of directors to PSA, and some UAW members fear a combined company would pit them against European workers for product allocation."
 

Deckard Cain

Active member
Amazing ? I'm hearing the same buzz words [ economics of scale ] that floated about in 1998 when Daimler and Chrysler had a "merging of equals", LOL ! It didn't take long to figure out that Daimler bought out the bigger Chrysler Corporation ! And all the rosy talk was well just that . Electric cars that no one really wants except the vocal few. If you are stll working for FCA or drawing a pension, BEWARE ! The goal here with PSA is saving $$ by any means necessary.

From the Detroit News Nov.05 2019 quote below:
" Fiat Chrysler under the proposed combination would surrender majority control of the new company's board of directors to PSA, and some UAW members fear a combined company would pit them against European workers for product allocation."
Your trauma with what Daimler did to Chrysler is understandable but projecting that into PSA is just dumb.
Electric cars are one of the only growth segments in the US auto market, and in Europe it's not only just a few that want it. For example, in my country, 51% of drivers want to buy an EV as their next car. Furthermore, the tightening emissions standards in Europe require heavy investments to maintain operations and this merger will address precisely that.
Yes, there's a goal of saving money. Do the north american workers need to be afraid? Considering that FCA is capacity constrained in the US I don't think so. That's a sign of a well managed operation.

Also, the biggest single shareholder in the new group will still be Exxor, even if they will be a minority shareholder. So don't expect a big change in the US side of the group. Chrysler and Dodge will continue to decline. Jeep and Ram will get all the product. Same as today.
 

Bili

Official Pilot
Staff member
Amazing ? I'm hearing the same buzz words [ economics of scale ] that floated about in 1998 when Daimler and Chrysler had a "merging of equals", LOL ! It didn't take long to figure out that Daimler bought out the bigger Chrysler Corporation ! And all the rosy talk was well just that . Electric cars that no one really wants except the vocal few. If you are stll working for FCA or drawing a pension, BEWARE ! The goal here with PSA is saving $$ by any means necessary.

From the Detroit News Nov.05 2019 quote below:
" Fiat Chrysler under the proposed combination would surrender majority control of the new company's board of directors to PSA, and some UAW members fear a combined company would pit them against European workers for product allocation."
Not true. 5 from Exor, 2 from France, 2 Peugeot family and 1 Dongfeng plus new CEO. Check legislative for CEO's responsibility.

AFAIK this merger will not have any impact on North American (ex Chrysler or Latin American (ex Fiat) business.
It's all about Europe (ex Fiat) business.

Electrification? It's catching pretty fast in Europe. Even Mike Manley said that so far technology adoption in Europe is faster than FCA's projection.
 

Deckard Cain

Active member
And it will be even faster. The german government just doubled the incentives for EVs to 6,000€.
Ford and GM are screwed in a few years. They're way behind everyone else in electrification.
 
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