Tag Archives: fca

Stellantis Enjoys Warm Welcome from European Investors

Stellantis Chairman John Elkann is meeting with the media tomorrow to talk about the company’s future.

Not every merger involving an automaker these days involves a blank-check company. The newly minted tie-up between Fiat Chrysler Automobiles N.V. and Peugeot S.A. was finalized over the weekend and the resulting company, Stellantis N.V., is enjoying a warm welcome.

At least on the stock market.

The new company’s stock trades on three exchanges and it finished the day on the Paris exchange up nearly 7%, closing at €13.14. It also jumped up 7.7% on the Milan exchange.

The New York Stock Exchange, the third exchange it’s traded on, was not open today due to the Martin Luther King Jr. holiday.

(Chrysler is no more as Stellantis comes to life.)

CEO Carlos Tavares has a lot on his corporate plate now that the merger is complete.

The $52 billion merger of near equals creates a massive enterprise with operations on six continents, employs about 400,000 people, sells – at least for the time being – 14 vehicle brands and sells 8.1 million vehicles annually, making it the fourth-largest automaker in the world behind Volkswagen, Toyota and the Renault-Nissan-Mitsubishi Alliance.

With all of those possibilities, it’s going to take a press conference Tuesday to start revealing what Stellantis will look like now that’s it’s a living, breathing entity. What brands will stay? How many workers will keep their jobs?

People are nervous because the CEO of the new enterprise, Carlos Tavares, has a history of being fearless when it comes to eliminating unprofitable operations and processes in the pursuit of corporate profit. One need only look at how what he did with former General Motors’ subsidiary Opel. A money-loser for a decade, he had it in the black in one year.

(FCA CEO Manley gets new assignment following Stellantis merger.)

“Stellantis faces a mixed outlook as U.S. stimulus plans may buoy Chrysler vs. a more uncertain outlook for Peugeot in Europe,” Michael Dean, BI automotive analyst told Bloomberg. “Former PSA CEO Carlos Tavares takes the helm and, similar to his handling of PSA’s takeover of Opel in 2017, we anticipate a new strategy in the first 100 days of his stewardship. All regions face a difficult 1H amid continued lockdowns.”

Quirky name aside, investors gave Stellantis a warm welcome when it began trading Monday.

The two companies have worked to allay fears of major cutbacks in France and Italy. While top managers have outlined plans to trim costs by $6 billion following the merger, they insist they will be able to do that without closing any plants. They have outlined 40% of those cost savings coming from purchasing, 40% from combining product development efforts, and 20% from marketing and other operations.

However, it’s unclear how Tavares plans to tackle other issues such as improving the company’s performance in China, the world’s largest automotive market, and bolstering its electrification efforts, especially in the aforementioned China as well as in the U.S. Just addressing those two issues are likely to require billions of dollars and euros. Some of plans for these things and more may get touched on Tuesday, Marco Santino, a partner at consulting firm Oliver Wyman, told Reuters.

(Fiat Chrysler and PSA not exactly a “merger of equals.”)

“He has proven to be the kind of person who prefers action to words, so I don’t think he will make loud statements or try to over-sell targets,” he said.

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Jeep Easing Electrification Into Japanese Market, World to Follow

<img data-attachment-id="1739330" data-permalink="https://www.thetruthaboutcars.com/2020/10/jeep-easing-electrification-into-japanese-market-world-to-follow/2019_11_14_6028_wallbox_new4-1/" data-orig-file="https://www.thetruthaboutcars.com/wp-content/uploads/2020/10/2019_11_14_6028_Wallbox_new4-1.jpg" data-orig-size="1920,1280" data-comments-opened="1" data-image-meta="{"aperture":"14","credit":"","camera":"Canon EOS 5DS R","caption":"","created_timestamp":"1573744368","copyright":"","focal_length":"115","iso":"100","shutter_speed":"1.3","title":"","orientation":"1"}" data-image-title="Jeep Renegade 4xe" data-image-description="

Jeep/FCA

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One of the main reasons Fiat Chrysler Automobiles is partnering with PSA Group is to help soften the financial blows of battery development, we literally just talked about it. But the French automaker has its own reasons for wanting to get into bed with the FCA, namely its rather diverse list of subsidiaries — with Jeep occupying spot número uno.

Despite being offensively American to some, Jeep is the sixth most-popular nameplate in the United States. It also happens to be world-renowned as an off-road brand and had made strong inroads in places you’d never expect. This has forced the brand to rethink its global appeal, requiring Fiat Chrysler to issue some market-specific models like China’s Jeep Commander PHEV and the Renegade 4xe — the latter of which is already sold in Europe and slated to launch this November in Japan. But these models are only the tip of the iceberg as FCA intends on meeting ever-tightening emissions regulations in major markets that aren’t the United States.

Purists will undoubtedly cry foul here. For many, if it isn’t powered entirely by combustible fuels and body-on-frame then it’s an abomination unworthy of the Jeep name. But these people are increasingly finding themselves edged out of the conversation as aggressive mandates in China and Europe leave the company with fewer options. As a positive, these changes are assumed to help improve the brand’s global volume — especially in Japan where Jeep is already the best-selling American brand.

<img data-attachment-id="1739326" data-permalink="https://www.thetruthaboutcars.com/2020/10/jeep-easing-electrification-into-japanese-market-world-to-follow/jeep__4xe-17/" data-orig-file="https://www.thetruthaboutcars.com/wp-content/uploads/2020/10/Jeep__4xe-17-e1603743965756.jpg" data-orig-size="3184,2123" data-comments-opened="1" data-image-meta="{"aperture":"10","credit":"Ph.Alberto Giorgio Alquati","camera":"Canon EOS-1D X","caption":"","created_timestamp":"1593507777","copyright":"","focal_length":"95","iso":"200","shutter_speed":"0.016666666666667","title":"","orientation":"1"}" data-image-title="Jeep Renegade 4xe" data-image-description="

Jeep/FCA

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While positively dwarfed by the sales enjoyed by practically every Japanese brand selling domestically, Jeep still saw 13,360 deliveries in the Land of the Rising Sun in 2019 — placing it right between Volvo and Peugeot. With help from the Renegade 4xe, Fiat Chrysler thinks it can improve those numbers for 2021. According to Automotive News, the automaker expects to sell roughly 4,000 Renegades in Japan next year to that end. Around 10 and 20 percent of those are presumed to be of the hybrid persuasion.

From AN:

That overall volume may not sound overwhelming compared with North American Jeep sales, but the hybrid Jeep’s arrival taps into growing Japanese interest in both the brand and electrified vehicles in general, especially hybrids.

“We understand we need to be present with electrified vehicles,” FCA Japan CEO Pontus Häggström said. “Japanese consumers are keen on technology. This is the latest technology the group has.”

Jeep intends on electrifying every single model in its lineup by 2022, specifically so it can continue doing business around the globe. Barring some regulatory changes in the United States, plenty probably won’t be targeting North American customers. But they’ll be handy in other markets where the average engine size is much lower. Jeep’s even going to hybridize the Wrangler (which will be sold in the U.S.) and promised it wouldn’t lose a single shed of its off-road prowess.

<img data-attachment-id="1739328" data-permalink="https://www.thetruthaboutcars.com/2020/10/jeep-easing-electrification-into-japanese-market-world-to-follow/jeep-renegade-th_4xe-65/" data-orig-file="https://www.thetruthaboutcars.com/wp-content/uploads/2020/10/Jeep-Renegade-TH_4xe-65-e1603743978526.jpg" data-orig-size="3184,2123" data-comments-opened="1" data-image-meta="{"aperture":"7.1","credit":"Ph.Alberto Giorgio Alquati","camera":"Canon EOS-1D X","caption":"","created_timestamp":"1593514797","copyright":"","focal_length":"300","iso":"160","shutter_speed":"0.0015625","title":"","orientation":"1"}" data-image-title="Jeep Renegade 4xe" data-image-description="

Jeep/FCA

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In the case of the Renegade 4xe, Fiat Chrysler ditched the standard powerplant for a 1.3-liter gas burner (front axle) and a 60-horsepower electric motor (rear axle) mated to an 11.4 kWh battery. Jeep even has a Trailhawk version of the hybrid that positively trumps the old 2.4-liter Tigershark’s maximum output with combined (electric/ICE) 238 hp and 199 lb-ft of torque.

That’s not too shabby and will undoubtedly make it an appetizing alternative to something like the Suzuki Jimny, which may soon have the non-electric, mini-SUV off-roading world all to itself. Though it was recently removed from the European market after its positively tiny motor failed to meet emission regulations for 2021. Suzuki has gotten around this by selling the tiny 4×4 as a “light commercial vehicle” while it attempts to figure out a more permanent solution. But if that doesn’t illustrate exactly why Jeep is so sprung on hybridization, nothing does.

<img data-attachment-id="1739324" data-permalink="https://www.thetruthaboutcars.com/2020/10/jeep-easing-electrification-into-japanese-market-world-to-follow/jee_4xe_01/" data-orig-file="https://www.thetruthaboutcars.com/wp-content/uploads/2020/10/Jee_4xe_01-e1603743944116.jpg" data-orig-size="3719,2303" data-comments-opened="1" data-image-meta="{"aperture":"13","credit":"","camera":"Canon EOS 5D Mark III","caption":"","created_timestamp":"1595493298","copyright":"","focal_length":"35","iso":"160","shutter_speed":"0.008","title":"","orientation":"1"}" data-image-title="Jeep 4xe family" data-image-description="

Jeep/FCA

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[Images: FCA]

Fiat Chrysler to Judge: GM’s Being Paranoid, Please Ignore

<img data-attachment-id="1694902" data-permalink="https://www.thetruthaboutcars.com/2019/10/fiat-chrysler-and-psa-flirting-with-a-merging/shutterstock_1487541980/" data-orig-file="http://ghostridermotorcycle.com/wp-content/uploads/2020/08/fiat-chrysler-to-judge-gms-being-paranoid-please-ignore-5.jpg" data-orig-size="1000,750" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"}" data-image-title="FCA HQ Fiat Chrysler headquarters fca headquarters FCA sign offices auburn hills" data-image-description="

Daniel J. Macy/Shutterstock

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General Motors desperately wants to reopen a case dismissed last month by a federal judge, but Fiat Chrysler’s having none of it.

The racketeering lawsuit filed by GM against its crosstown rival alleged that FCA secured unfair labor advantages over GM via bribed UAW officials, with the automaker claiming last week that it possesses new evidence capable of convicting its automotive foe. A number of offshore bank accounts fueled the bribery effort, GM claims, with the automaker’s court filing accusing former UAW Vice President (and ex-GM board member) Joe Ashton of being a paid mole.

Gripping stuff, but FCA says it’s seen this movie before — and it’s a stinker.

According to Reuters, FCA has requested U.S. District Judge Paul Borman to pay no attention to GM’s request, saying its rival’s allegations amount to a “third-rate spy movie, full of preposterous allegations.”

The conviction of Ashton and imprisonment of former FCA labor negotiator Alphons Iacobelli, as well as the sweeping federal investigation into corruption and bribery at the highest levels of the UAW gives GM’s lawsuit weight, but the automaker won’t be able to prove anything unless it gets its day in court. Former UAW president Dennis Williams is also named in the suit as a beneficiary of FCA’s alleged bribery scheme.

GM has claimed since the outset that corrupted bargaining practices left FCA with an unfair labor cost advantage over its domestic rivals, costing its own operations billions. It wanted to collect, and still does.

In a court filing early last week, GM claimed that FCA’s bribery cash flowed by way of bank accounts in the Cayman Islands, Switzerland, Luxembourg, Liechtenstein, Italy, and Singapore. FCA says it’s all bunk, stating to the judge that it operates facilities in dozens of countries. As such, the number of offshore accounts is “unremarkable, and certainly not illegal.”

Continuing, FCA said the naming of FCA officials was a “despicable” act reminiscent of the McCarthy witch hunt of the 1950s.

In a letter seen by Reuters on Monday, FCA CEO Mike Manley told employees that GM’s efforts amount to a case of sour grapes.

“It is… clear to me that this series of attacks is directly related to our success in competing and winning where it matters, in the market,” Manley wrote. “The consistent strengths we’ve demonstrated over the last decade will be deployed to even greater effect as we complete our merger with Groupe PSA.”

Unswayed by FCA’s new filing, GM remained adamant that it would reveal “the full extent of harm the FCA bribery scheme caused GM,” stating that, “FCA’s corruption of the collective bargaining process remains undeniable.”

[Image: Daniel J. Macy/Shutterstock]