FCA and PSA formally agree to merger:Merger Wednesday

[AlexB]

Carlos takes back the call to go over the finances, and the terms & conditions.

 

[AlexB]

Manley goes over the size of the merge company , the brands, and size of cash on the books.

 

[AlexB]

Manley discuss developing leading Mobility Solutions with synergies savings, and once again repeat no plant closures.
Hands back to Carlos.

 

[AlexB]

Carlos discussing the likelihood Europe will have another round of c02 standards in 2030, and how being merged is better to deal with such challenge.

 

[AlexB]

NOW Time for Q&A

 

[AlexB]

First is an European Analyst about FCA's European labor cost, and try to give the question to Carlos. Carlos talks about FCA's Worldwide Manufacturing Labor cost instead, and says FCA is ahead of PSA on "Worldwide Manufacturing Labor cost".

 

[AlexB]

Carlos says in reponse to a question about merge Company cash position, and he states he hadn't thought about what is the right amount of cash on FCA-PSA books, "give me some time" and laughs.

 

[AlexB]

In reponse to another Euro analyst, Carlos is once pointing to the 2030 EU c02 emissions standards as a reason for this merger.
He talking about keeping the agility of both companies.

 

[AlexB]

Anaylst from UBS wants to ask 3 questions.
*Challenging them on generating cash flow in the first year
*Still challenging the FCA's emission pooling on Tesla.
*FCA's capacity in Europe.

 

[AlexB]

Carlos answers UBS anaylst by saying "cash avoidance spending" will help the Merge Company generate cash flow in year 1 despite various merger cost.
Manley mention FCA will meet EU c02 standards in 2021/2022 PSA or no PSA
As for FCA's capacity in Europe, Manley pushsback by saying the robust product plans in Europe coming in 2022 period will take care of the plants.

 

[AlexB]

Carlos in reponse to a question about FCA's standing in Europe vs Opel standing Europe, he says FCA is well rooted in Europe,and talks about rich Italian heritage that can drive emotion.

 

[AlexB]

Adam Jonas of Morgan Stanley is hear asking when will they speand more on electric than ICE? He calls it a historic day for both companies.

 

[AlexB]

Jonas is asking about hybirds and GM not wanting to spend on hybirds.
Carlos stated all the solutions have to be on the table because consumers have different needs, and steering back to the merger and the benefits of scale with purchasing .

 

[AlexB]

Adam Jonas stated the merge company should simply be called "Jeep".
Manley stated he isn't sure that he would do that.

 

[Bili]

They are avoiding answering questions related to a platform sharing. I have a feeling they've played with platform sharing on presentation so that it looks more rosy for French side.

 

[AlexB]

Question about PSA Brands re-entering the North America market, Carlos stated it too early. Stated the actions FCA has undertook to improve North America margins over the past years. I guest the answer is no without saying it.

 

[AlexB]

Bank of America analyst ask how they can keep so many European jobs, while at the same time building more EV's which need less people (Batteries vs powertrain engines).

 

[AlexB]

Carlos kind of side steps the question about European workforce, and instead mention the need to have people to assemble the battery packs.

 

[pumadog]

Thanks for the transcripts!

 

[AlexB]

Carlos overall style in my view is to play "dodge(no pun") the questions", whereas Sergio would air out his brain on these calls, being part charmer, part salesman. Sergio would even entertain ideas that no "traditional" CEO would touch like the concept of Jeep+RAM as a standalone automaker which fan flames" killing or selling to Chinese Dodge AND Chrysler" BS Stories.
Carlos will straight avoid the direction of questions, I wonder how long before John & Carlos will have talk about that.
Manley thanked the analyst for participating and joke that even through he hasn't always enjoy all the analyst questions since taking the CEO position,he appreciate their interest in FCA.
Carlos stated he has nothing to add to Manley closing comment.