According to sources at Automotive News Canada, Fiat Chrysler Automobiles (FCA) and Groupe PSA are looking to sign a formal agreement for the merger of both companies sometime this week. Now, that the recent four-year contract agreements with the United Auto Workers (UAW) have been completed, both sides are looking to get the groundwork for the merger completed by the beginning of the new year.
While nothing has been made public yet, both sides have been making progress on a memorandum of understanding, with a few issues still having to be ironed out. According to some of our sources at FCA US Headquarters, certain departments have already been getting memos expressing upcoming changes in leadership, once the merger is completed.
It has been announced that the new company’s headquarters will be based in the Netherlands, with Groupe PSA CEO Carlos Tavares taking the new CEO position, while FCA Chairman John Elkann would maintain his position as chairman of the new company.
A lot of people have been asking, what will happen to current FCA CEO Mike Manley after the merger. Sources close to MoparInsiders.com, are saying it is likely that Manley will head the European arm of the new company.
Before serving as CEO, as served as Head of Jeep brand, Head of Ram brand and Chief Operating Officer for the APAC region. He also held positions as an executive for the international activities of Chrysler outside of NAFTA, where he was responsible for implementing the co-operation agreements for distribution of Chrysler Group products through Fiat’s international distribution network. He also served as Director of Network Development for the U.K. arm of DaimlerChrysler, so Manley brings a lot of experience to the table on global sales growth, something that FIAT brand has been struggling without in Europe outside of Italy.
However, the FIAT brand’s deep Italian heritage as well as the French government’s 12% stake in the current Groupe PSA, could prove to cause some issues to the proposed merger. Both sides have declined to comment on most of the merger details, but both are committed to getting a deal signed before the end of December.
Merging the two companies would create the world’s fourth-largest automaker. This would make the current position of the current FCA US company, leapfrog both General Motors (GM) and Ford Motor Company to become the largest of the Detroit automakers (the Big-3), overnight.
GM currently has a racketeering lawsuit pending against FCA US, for allegations involving past UAW negotiations, so it is also not sure how that will play a factor in the merger details.
The new company would also create the second-largest automaker in Europe for sales and squarely aiming at the Volkswagen Group, which has a firm grasp on the number one spot.