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Suddenly the French are hot for Fiat Chrysler Automobiles NV, Detroit’s new darling.

Not to be outdone by Groupe PSA’s unambiguous interest in the maker of Jeep SUVs and Ram pickups, the Financial Times says rival Renault SA and its longtime partner, Nissan Motor Co., are interested in allying, too, with FCA — after they reshape their generation-old alliance in the post-Carlos Ghosn era.

The British business daily says Renault and Nissan intend to rekindle merger talks within the next 12 months, and that the merged automaker then would pursue an undefined deal with FCA in a bid for global scale. Any prospective tie-up would give the resulting company a geographically diverse footprint with considerable presence in Europe and profit-rich North America.

By this logic, the prevailing French automaker would get access to FCA's sprawling North American dealer network to peddle its metal to would-be American customers; would ally itself with the hottest, fastest-growing SUV and pickup brands in the United States; would reap the prospective autonomous-vehicle benefits (and narrative) of FCA's partnership with Google parent Alphabet Inc.'s Waymo LLC self-driving car unit. 

In exchange, FCA would get yet more exposure to slow-growth Europe and its smothering labor laws; a middling French-brand presence in China to match FCA's subpar presence there; and the certain meddling of French politicians obsessed with the political implications of job cuts associated with a merger or the arrival of the Auto 2.0 spaces of mobility, autonomy and electrification.

The reason: the French government owns 15.1 percent of Renault and a French public investment firm, BPI France, owns 12.23 percent of PSA. And Dongfeng Motor Group Co. Ltd., the Hong Kong-based partner of both PSA and Renault, also owns 12.23 percent of PSA, presenting a potentially knotty political problem for FCA in the Make-America-Great-Again era of Trump.

Does your head hurt yet? Call it a Parisian headache, its symptoms characterized by creeping desperation and delusions of grandeur likely to be shaped by French political calculations for both Renault and PSA, maker of Peugeot and Citroën vehicles.

That's because job one for French politicians is maximizing employment even as the industry approaches a technological shift to electrification, courtesy of regulators in China and the French-influenced European Union. The trend is expected to force dramatic downsizing for automakers around the world, especially on the factory floor.

Officially, FCA says "no comment." But CEO Mike Manley in recent weeks declined to squash merger speculation, borrowing a page from his mentor, Sergio Marchionne: confirm reality, exclude little and commit to nothing, whatever the ensuing publicity.

FCA is financially and operationally stronger today than any time in its decade-long history. Its Jeep and Ram brands, led by Manley even after his ascension to the top job just days before Marchionne's death last July, remain on a tear — so much so that the automaker plans to build Detroit's first assembly plant in nearly 30 years, even as it expands production in Warren.

Necessary, that, but not sufficient. The automaker's controlling shareholder — Exor SpA, the holding company for the controlling Agnelli clan — is seeking to strengthen the group's automotive holdings further, according to a source familiar with the situation.

The upshot: FCA's effective owners are open to exploratory discussions with PSA, Renault or any other industry rival that could bolster its position, provide additional scale and potentially compensate for geographic, technological or product shortcomings.

That doesn't mean a Franco-Japanese-FCA deal is probable. But it does mean one could be possible. In theory. Someday. Or never.

In an industry besotted a generation ago with brand collecting (Ford Motor Co. and Volkswagen AG) and whopping transnational mergers (DaimlerChrysler AG), partnerships are the new new thing. Ford and VW on commercial vehicles, General Motors Co. and Honda Motor Co. on autonomy, BMW AG and Daimler AG on self-driving vehicles and mobility services.

The reason is complex and simple all at the same time: At the nexus between the first automotive century and the second, no one possesses the capability to do it all and do it alone. That realization, landing hard as the transition accelerates and draws in tech heavyweights, is fueling an urgency all its own. 

If separate pushes by France's PSA and Renault to partner with a North American player say anything, that's it.

Daniel.Howes@detroitnews.com

(313) 222-2106

Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.

 

 

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