Fiat Chrysler, Groupe PSA merge to become Stellantis
Fiat Chrysler Automobiles is no more.
Well, the brands still exist, but the automaker producing Jeep SUVs and Ram pickups said on Saturday morning it had closed its transatlantic merger with French rival Groupe PSA. Stellantis NV is the fourth-largest automaker in the world by volume with the global footprint and scale executives hope will provide the capital to invest in technologies to stay competitive in the coming age of autonomy and electrification.
It's the third time in as many decades that Chrysler will be in the hands of another foreign entity. Stellantis, for now, retains an industry-leading 14 brands from Jeeps and Rams to Fiat minicars and Peugeot family cars and SUVs. Alfa Romeo, DS Automobiles and Maserati play in the luxury and premium segments. There's no Stellantis brand — that's just the name of the holding company.
The combined company is domiciled in Amsterdam, though it retains major operations in Auburn Hills, Paris and Italy. Shares will begin trading Monday under the ticker STLA in Europe and on Tuesday on the New York Stock Exchange due to the Martin Luther King Jr. holiday.
Stellantis expects to save $5.9 billion annually related to condensing platforms and powertrains, greater purchasing power and redundancies in sales, marketing, quality, logistics and supply-chain management. Executives have emphasized none of the forecasted savings will result from closing plants.
PSA CEO Carlos Tavares steers the Stellantis ship. The Portugal native has a reputation as a cost-cutter, but also as a turnaround specialist for his leadership at PSA since 2014. When PSA acquired General Motors Co.'s European brands in 2017, Opel and Vauxhall were profitable again in 18 months after having lost money for decades. That effort did include 9,000 early retirements and voluntary layoffs.
"He's turned around more than one company already," said David Kelleher, a dealer in Glen Mills, Pennsylvania, and chairman of FCA's dealer council. "We don’t need a turnaround necessarily, but we want expand on our footprint. That’s the opportunity in front of us. He seems like he's maybe the smartest guy in the room."
FCA chairman John Elkann, scion of Fiat's founding Agnelli family, is continuing in his role at Stellantis. PSA, however, has appointed six of the 11 members of the board, including Tavares.
Although not on the board of directors, FCA CEO Mike Manley will remain with Stellantis, helming operations in North and South America where Fiat Chrysler historically has been successful. PSA currently does not have a retail presence in the United States or Canada.
Manley's continuing management is a comfort for dealers like Dave McDonald of Livonia Chrysler Jeep: "I've watched what he has done with Ram. I've watched a guy who has listened to the needs of dealers and customers. He's a true leader. The merger is nothing but a positive thing for us."
Stellantis, however, will have an uphill battle in China, the world's largest auto market. Neither of its predecessors hold strong shares there.
"I didn't see anything that could be break-even in the near future," said Ferdinand Dudenhöffer, a professor of automotive economics at the Center for Automotive Research at the University of Duisburg-Essen in Germany. "GM has a strong market share. Toyota is improving its market share. The same applies to the VW group. They are not visible in the market in China."
A global news conference with Tavares is scheduled Tuesday to hear more about the new company's plans.