Fiat Chrysler proposes merger with Renault, would be third-largest automaker - Diamond-Star Motors 2.0

Fiat Chrysler proposes merger with Renault, would be third-largest automaker

Renault welcomes the idea.

www.foxnews.com

Fiat Chrysler proposed on Monday to merge with France's Renault to create the world's third-biggest automaker and combine their investments in the race to make new electric and autonomous vehicles.

The merged company would reshape the global industry: it would make some 8.7 million vehicles a year, leapfrogging General Motors and trailing only Volkswagen and Toyota.

Shares of both companies jumped over 10% on the news of the offer, which would see each side's shareholders split ownership in the new manufacturer.

Renault welcomed the idea. The company's board met Monday at its headquarters outside Paris to discuss the proposal and said afterward that Renault will study it "with interest." In a statement, Renault said such a fusion could "improve Renault's industrial footprint and be a generator of additional value for the Alliance" with Japan's Nissan and Mitsubishi.

Fiat Chrysler's offer comes at a key moment for Renault. The French manufacturer had reportedly wanted to merge with Nissan, but those plans were derailed by the arrest of boss Carlos Ghosn on financial misconduct charges in Japan.

Now, questions are growing over the Renault-Nissan-Mitsubishi alliance , which is the biggest maker of passenger cars in the world. While Fiat Chrysler says the merger with Renault would accommodate the alliance and lead to savings for them, it is unclear how the Japanese companies might react in the longer term to being tied to a much larger partner.

A deal would save 5 billion euros ($5.6 billion) for the merged companies each year by sharing research, purchasing costs and other activities, Fiat Chrysler said in a statement. It said the deal would involve no plant closures, but didn't address potential job cuts.

The companies are largely complementary: Fiat Chrysler is stronger in the U.S. and SUV markets, while Renault is stronger in Europe and on electric vehicle developments. Together, they would be worth almost $40 billion euros.

Analysts at financial firm Jefferies said it was "hard to disagree with the logic" of the deal as there is a strong fit in the markets each company covers and the brands they offer.
"The elephant in the room is who will run the entity," analysts Philippe Houchois and Himanshu Agarwal wrote in a note to investors.

Mergers of equals can be difficult to manage over questions of who gets the top leadership positions and which brands are promoted and invested in most. A tie-up between Daimler and Chrysler in the 1990s was billed as a merger of equals, but it collapsed nine years later amid cultural differences and recriminations.

Investors were nevertheless enthusiastic, pushing shares in Fiat Chrysler up 11% and Renault 14% in European trading.

The French government, which owns 15% of Renault, said it is "favorable" to the idea of a merger with Fiat Chrysler but wants to study its conditions more carefully, especially in terms of "Renault's industrial development" and employees' working conditions, government spokeswoman Sibeth Ndiaye said.

Such a merger would show "our capacity to respond to European and French sovereignty challenges in a globalized context," she said. "We need giants to be built in Europe."

Collaboration between automakers has taken on greater importance in recent years as they seek to build their technological capabilities in pursuit of electrical vehicles, net connectivity and artificial intelligence for vehicles. Automakers are also under pressure from regulators , particularly in Europe and China, to come up with electric vehicles so they can meet tougher climate change regulations and after scandals over the amount of pollutants engines truly emit.

The merger idea is the biggest corporate move so far by Fiat Chrysler CEO Mike Manley, who took his position after the unexpected death of the charismatic leader Sergio Marchionne last year.

What happens to jobs is likely to be a source of concern.

France's influential CGT union warned against cuts should a deal go through, and said it wants the French government to retain a blocking stake in any new company.

Matteo Salvini, the leader of Italy's rightwing populist League party and the deputy premier, said that "if Fiat grows, it is good news for Italy and Italians," though he warned a deal should protect "every single job."

In Tokyo, Nissan CEO Hiroto Saikawa wouldn't comment directly on the idea of the deal but said, "I am always open to exchanging constructive views on strengthening the alliance."

 

[ColtWalker1847]

GM also had some really crappy cars back then, the GM ignition switch fiasco, where car ignitions can switch to the off position while running, comes to mind.

Back when? Old GM tilt steering columns 60-90s were awesome. Goddamn gold standard. I'd put them in the ring of honor along with the HEI distributor, Saginaw PS pumps, and the 10SI alternator of shit they got really right.

Fite me.

 

[Vorpal Blade]

At least Mopar had the nigh-on unkillable slant six. The 318 V8 was nearly as difficult to kill, and the 383 V8 was fucking amazing for a non-hemi.

We used to have a Dodge Aspen station wagon with a 318 V8 and a manual transmission, 1979 model year, I believe. My grandmother bought it new and my parents ended up with it. They sold it sometime in the mid to late '90s. It's pretty amazing that you could still get a V8 in a compact car at that point and it wasn't even the largest engine. It was also offered with the 360.

Chrysler used to have Plymouth as kind of a Mopar counterpart to Fomoco's Mercury (think: cheap shit), but Plymouth's dead and gone.

Plymouth was indeed bottom of the line but Mercury was an upscale brand for Ford. It fell between Ford and Lincoln and was more like Ford's equivalent to Buick or Oldsmobile.

 

[pentylspacer2600]

im pretty anti trust man. i think we need to have a competitive economy not an economy with a corporate ruling class

 

[Ledian]

To my knowledge, FCA is backed into a corner. Here in the US, Chrysler-Jeep-Dodge and Fiat sell pretty poorly and have abysmal reliability. The domestic market is a mess and FCA is getting slapped around by everyone else. Toyota and Honda print money with every sedan, van, and SUV they sell, VW has so many brands, including Audi, that it's hard to see them not making money when most are profitable, BMW and Mercedes both make profit and easily curbstomp Chrysler in the luxury department.
When it comes to domestic brands, Ford is held afloat by it's trucks and vans round the world and GM is quite literally being kept afloat because the Chinese fucking love Buick like gangsters love their Mercs.
At this point, FCA is a corpse of an auto manufacturer. A shame considering that time to time, they do hit out of the ballpark and Jeep deserves better.

 

[Thiletonomics]

To my knowledge, FCA is backed into a corner. Here in the US, Chrysler-Jeep-Dodge and Fiat sell pretty poorly and have abysmal reliability. The domestic market is a mess and FCA is getting slapped around by everyone else. Toyota and Honda print money with every sedan, van, and SUV they sell, VW has so many brands, including Audi, that it's hard to see them not making money when most are profitable, BMW and Mercedes both make profit and easily curbstomp Chrysler in the luxury department.
When it comes to domestic brands, Ford is held afloat by it's trucks and vans round the world and GM is quite literally being kept afloat because the Chinese fucking love Buick like gangsters love their Mercs.
At this point, FCA is a corpse of an auto manufacturer. A shame considering that time to time, they do hit out of the ballpark and Jeep deserves better.

Even the Koreans in Hyundai-Kia are eating in to the Big 3's market share.

 

[CWCchange]

Chrysler's still around. For a bit they were hooked up with the people who make Mercedes-Benzes (and they were known as Daimler-Chrysler). I think that kind of fell apart, though. Chrysler used to have Plymouth as kind of a Mopar counterpart to Fomoco's Mercury (think: cheap shit), but Plymouth's dead and gone. They acquired AMC a while back and turned them into Eagle (which is dead by now as well) and also acquired the rights to anything Jeep a while ago (probably by buying whoever the fuck bought Willys back in the day?). Chrysler does not have anywhere NEAR the robust export/international market that Fomoco does or GM does (GM uses Holden in places like Australia, for example, and I think they might be tied to Opel somehow?) so you're probably not going to see much Mopar shit outside North America, if I had to guess.

GM sold Opel to Peugeot a couple years back.

Toyotas are good, for the most part. Some issues here and there, but I loved the shit out of old Celicas, and someone in my family had an '80 Toyota pickup that absolutely WOULD. NOT. DIE. Hondas are even better on average but they're fucking expensive.

Apart from Lexus, Turdoyta hasn't made a genuinely good car for the foreign market in like thirty years, and the only people who drive foreign pickups are Le 56% beaners and ISIS.

Even the Koreans in Hyundai-Kia are eating in to the Big 3's market share.

If women weren't allowed to drive, Korean yugos would've been a failure in the West.

 

[Thiletonomics]

If women weren't allowed to drive, Korean yugos would've been a failure in the West.

The Daewoo was pretty much the Korean version of the Yugo, as most of their cars were crap, which probably contributed (although I'm not sure by how much) to the entire Daewoo chaebol falling into bankruptcy, and GM subsequently acquiring Daewoo's automotive division for some reason.

 

[RP 520]

Aren't both Fiat Chrysler and Renault infamous for being shit automakers?

and so was Chrysler back when it was still an independent company. It's like FIAT is trying to be the Kengle of car companies and scoop up all the shitty ones to become the biggest, shittiest car company.

 

[ColtWalker1847]

Apart from Lexus, Turdoyta hasn't made a genuinely good car for the foreign market in like thirty years, and the only people who drive foreign pickups are Le 56% beaners and ISIS.

Lexuses are just Toyotas with a different trim package. Mechanically they are exactly the same. I have no idea why they are so popular. That goes for Toyotas in general, come to think of it. They aren't as well engineered as people think. Often they go the MB route of shoehorning shit in there and making it all a maintenance nightmare. But instead of doing it for exceptional teutonic engineering purposes they do it to save a buck during assembly. Lean manufacturing. Of course that's everything now.

The last rig that was designed to be owner-serviceable that came off a line was the Saturn S-class in the early 00's. Everything since has required proprietary software and tools to even diagnose what is wrong. Let alone fix it. Long gone are the days when you could fix most anything on a car with a 120-piece Craftsman toolkit, a multimeter, and a bit of know-how.

 

[Ilikeoreos]

There was also the fact that old Pintos and Mustangs were fucking fireballs waiting to happen, and some of their more recent models (Explorers) have fucking terrible transmission issues.

Ford supposedly put the Pinto out on the market knowing that it had an unsafe gas tank design because they calculated that redesigning it would cost more than paying the families of burn victims. The same thing happened when the prototype Bronco IIs failed rollover tests.

 

[Red Hood]

Anything made my Fiat Chrysler is horrible, even their Jeeps, which used to be a good brand under the corperation in the past. I've seen too many Dodge Charger Police Pursuits blow up, Dodge Minivans peter out, Durangos & Rams on the side of the road, and commercial vans of theirs fuck up to count.

Jeeps were good when they still were building the American Motors designed YJ and Cherokee. Once those models were phased out they rapidly became another shit brand riding on image and nostalgia.

 

[ColtWalker1847]

Ford supposedly put the Pinto out on the market knowing that it had an unsafe gas tank design because they calculated that redesigning it would cost more than paying the families of burn victims.

That was just speculation. Honestly I think it was just oversight. Putting gas tanks inside the subframe wasn't a normal thing at the time. Remember the shitfit they had with Chevy C/Ks in the 80's and their side-saddle fuel tanks? Remember when 60 Minutes smeared them by faking a crash test? Good times.

The same thing happened when the prototype Bronco IIs failed rollover tests.

I get why they just went with it. It was on the Ranger chassis. Changing that out means you are basically building a new rig and you lose a lot of parts commonality. Those kinds of little SUVs of that era were all prone to it too. S-10 Blazers, Cherokees, Rodeos, 4Runners, Pathfinders, Montero/Raiders, etc. None of them did well in rollover tests. It took SUVs getting bigger and wider to finally end it.

There was a good long while there where activists and their fuckbuddies in the media used any excuse to slam the US auto industry and exaggerated to the point where they were pretty much just making shit up. Even the "unsafe at any speed" Corvair didn't deserve it's rep. At least not any more then the VW bug and Karmann Ghia who had the same "design flaws". Shit, at the time I don't think the Beetle even had a collapsible steering column. But, yeah, the Corvair is the one to worry about. Thanks Ralph, you giant pinko communist.

 

[JosephStalin]

This reminds me of the Studebaker-Packard merger of 1954.

Cars We Remember: The Packard-Studebaker merger was doomed from the start

Q: Greg, I enjoy your columns on the old days of automobiles and am a big Packard fan from days gone by. I grew up in the 1950s like you did, and remember

www.norwichbulletin.com

Cars We Remember: The Packard-Studebaker merger was doomed from the start


By Greg Zyla

Posted May 29, 2018 at 10:02 AMUpdated May 29, 2018 at 10:02 AM

Q: Greg, I enjoy your columns on the old days of automobiles and am a big Packard fan from days gone by. I grew up in the 1950s like you did, and remember these wonderful machines during my youth. Around where I lived, if you had a Packard, you were living the good life.
I do know that the Packard failed when Studebaker joined forces with them but I’d like your opinion on this merger and also some Packard and Studebaker memories, good and bad. Thanks very much.
— Sam G., Arkansas

A: Sam thanks for your nice words and I’d be happy to answer this question.
Back when we were youngsters in the 1950s, I always looked at the wonderful Packard automobiles as top class American luxury cars that were in the Lincoln and Cadillac class. I remember that Buicks were also known for luxury, but they were below Cadillac on the GM pecking order and right above Oldsmobile. But you are correct that if your family owned a Packard, things were probably going well economically.

As the decade of the 1950s moved forward, Packard started to lose market share in the luxury car sales race. This reality led to what has to be one of the worst mergers in car history when Packard joined forces with Studebaker in 1954. Studebaker had way more dealers across the United States and the deal initially looked good.
Notable is the fact that it was the Packard front office that pursued the merger and not visa-versa as many enthusiasts initially thought. To make a long story short, the result was Packard losing its brand identity while Studebaker took over all marketing.

What Packard executives later discovered was that Studebaker “cooked the books” when presenting its financial strength disclosure, a fact that went undetected until the merger was legally solid and irreversible. (Caveat Emptor, right?)

As for some highpoints, perhaps the most beautiful Studebaker ever built was the “Hawk class” models that included the initial Golden Hawk in 1956 and then followed by the Silver Hawk, which appeared in 1957. Both were ahead of their time and respected today for outstanding two-door sport coupe styles. The initial 1956 Golden Hawk was the only Hawk powered by a Packard 352-V8. In 1957, the Packard V8 was dropped and the Studebaker design 289-inch V8 became standard in the Golden Hawk class. Notable is during its 1956-1958 production run, only 9,305 Golden Hawks were ever built.

The final “real” Packard came to market in 1956, when the company released some beautiful models. Packard’s design for 1956 included a facelift from the 1955 new generation, which replaced the famous “bathtub” Packards we came to love beginning with the post war 1948 design. Today, a 1956 Caribbean Convertible or hardtop in tri-tone color is worth big money on the collector auction stage and features Packard’s first ever overhead valve V8 that debuted in 1955.

Unfortunately, by 1957 the Packard cars were pretty much Studebakers with Packard badges and by 1958, Studebaker emerged as the sole brand that would take the company into the future. Packard officials felt that the larger Studebaker dealership network and the aforementioned “Packard badge on Studebaker built cars” would sell.
It was not to be, however.

With only a few Packards available in 1957, including a four-door sedan and a Country Sedan Wagon, consumers weren’t fooled and knew immediately that the Packards they loved in the 1940s and 1950s were now Studebakers with Packard badges. The result was Packard sales dropping to just 4,857 units, overall.

In 1958, even fewer Packards were sold and by mid-year, Packard-Studebaker announced all Packard production would cease.

Also impacting the new company was a Pan Am airline lawsuit against Packard in 1955. This lawsuit accused Packard of illegally using the names Clipper, Caribbean, Constellation, Pan American, Panama and Pacific on its cars. These were all names Pan Am used in its marketing programs and the lawsuit lasted into 1958 until Packard agreed to drop the names. Pan Am agreed to dismiss the lawsuit, although millions were already spent in defense. Also during this lawsuit era, Packard realized the “strength” of the Studebaker balance sheet was fraudulent, further complicating the new company cash flow problem.

Later, Studebaker found some profits thanks to the 1959 Lark, which debuted as a new body style on the same outdated 1958 chassis and mechanicals. The final Studebaker was built in 1966, called the Cruiser, and featured Chevrolet engines and transmissions as Studebaker had stopped driveline production in late 1965. As for trivia, there was a Studebaker Lark in the first ever 1959 Daytona 500 as Harold Smith started 50th of 59 cars and finished 31st. He was running at the finish and completed 159 of the 200 laps and won $100.

This sums up in a short column the sad tale of the Packard-Studebaker merger. Thanks for your letter and bringing back some positive and negative car memories from our childhood.

 

[CheezzyMach]

Yet whatever they put out gets destroyed by a Toyota.

How can white boys even compete?

That's a good point actually.

Why are American cars complete dogshit?* that kills me as a Ford fan RIP Focus *

 

[thx1138]

91% of Chryslers built are still on the road today!

The remaining 9% made it home.

 

[Dracula's Spirit Animal]

Honestly the only member of the Big Three I can't call "crappy" is GM and that's because I have basically zero experience with GM stuff. Fomoco? A lot of old Ford pickups have serious issues with oil getting to where it fucking needs to get to, and it's probably a problem their cars have had as well. There was also the fact that old Pintos and Mustangs were fucking fireballs waiting to happen, and some of their more recent models (Explorers) have fucking terrible transmission issues.

At least Mopar had the nigh-on unkillable slant six. The 318 V8 was nearly as difficult to kill, and the 383 V8 was fucking amazing for a non-hemi.

Ford got their act together for a few years after that (IIRC) 1995 F-150 - whatever that three door one was. They put out the least flawed US truck for a decade there.

Chevys in the truck market have been irredeemable garbage since about 1983, whenever they did that major redesign.

The 80s Dodges were horrific. They might as well have used water wheels for their transmissions. The Hemi phase was pretty solid, and the only reason I think they didn't become the dominant pick up was because Ford actually created a decent truck for sveral years, and had a chassis that wasn't a rubber band.

Cars, I am less opinionated on, although I had an early 80s Chevette that you could basically bomb, stab, drain the oil pan, and it was still pretty much indestructible.

Also lol about the above poster mentioning going through ECMs and wiring harnesses like candy. Very apt description.

 

[ColtWalker1847]

Ford got their act together for a few years after that (IIRC) 1995 F-150 - whatever that three door one was. They put out the least flawed US truck for a decade there.

Ahem
Triton V8 sparkplugs
Ford didn't start with the suicide door until the early 00's iirc. Copying Dodge on their extended cabs. Obvious mistake.

Chevys in the truck market have been irredeemable garbage since about 1983, whenever they did that major redesign.

Square-bodies were 1973-1987. Good shit. 1988 was the change. It was the beginning of the end of half-ton trucks as utilitarian vehicles. Dodge followed in 1994 (iirc the Dakota was half-ton rated too). Then Ford in 1997.

They used to be worth a shit. Remember? Straight axles. Granny low. Manual hubs. Vinyl seat. Steel dash. They were clunky as hell but they got shit done. Get one of those Toyota fanboys over here and give them a peek at an SM465 bolted to a NP205. Show them what "overbuilt" looks like. That used to go into half-tons.

All gone now. They eventually ruined 3/4 tons too. Made them these stupid luxury cars for getting groceries and taking kids to t-ball practice while rolling coal.

 

[ObeseScreamingBlackMan]

Renault has been making garbage cars for greasy Euro-niggas with bad credit since the 90s. They also attempted to make garbage for niggas with bad credit in America in the 80s when they bought AMC.

Nissan has been making garbage for niggas with bad credit ever since they partnered with Renault in the late 90s.

Mitsubishi Motors was making garbage for niggas with bad credit for years before Renault-Nissan let them in to the strategic partnership.

Chrysler has been making garbage for niggas with bad credit since the 1980s, and increased their capabilities for producing garbage for niggas with bad credit in the late 80s when they bought AMC from Renault.

Fiat is garbage made by and for Italians, who are basically niggas and a lot of them probably have bad credit.

If Fiat-Chrysler merges with the Renault-Nissan-Mitsubishi hydra, the resulting monstrosity is going to have the monopoly on Wal-Mart parking lot occupancy and also literally 100% of the new vehicles being repo'd in the hood will be made by them.

 

[ColtWalker1847]

Renault has been making garbage cars for greasy Euro-niggas with bad credit since the 90s. They also attempted to make garbage for niggas with bad credit in America in the 80s when they bought AMC.

Nissan has been making garbage for niggas with bad credit ever since they partnered with Renault in the late 90s.

Mitsubishi Motors was making garbage for niggas with bad credit for years before Renault-Nissan let them in to the strategic partnership.

Chrysler has been making garbage for niggas with bad credit since the 1980s, and increased their capabilities for producing garbage for niggas with bad credit in the late 80s when they bought AMC from Renault.

Fiat is garbage made by and for Italians, who are basically niggas and a lot of them probably have bad credit.

If Fiat-Chrysler merges with the Renault-Nissan-Mitsubishi hydra, the resulting monstrosity is going to have the monopoly on Wal-Mart parking lot occupancy and also literally 100% of the new vehicles being repo'd in the hood will be made by them.

Agreed. But the AMC Alliance was still a good car. And who didn't have the time of their life jumping the shit out of a wood paneled AMC Eagle as a kid?

Just me? Well it was fun. Until we broke it.

Best rigs for catching mad air in a freshly harvested pea field in order: '82 Subaru GL Wagon, '69 Dodge Charger, '86 AMC Eagle, '81 Chevy Luv Mikado, '75 Ford LTD Country Squire

Now you know.

 

[Ilikeoreos]

That was just speculation. Honestly I think it was just oversight. Putting gas tanks inside the subframe wasn't a normal thing at the time. Remember the shitfit they had with Chevy C/Ks in the 80's and their side-saddle fuel tanks? Remember when 60 Minutes smeared them by faking a crash test? Good times.

I get why they just went with it. It was on the Ranger chassis. Changing that out means you are basically building a new rig and you lose a lot of parts commonality. Those kinds of little SUVs of that era were all prone to it too. S-10 Blazers, Cherokees, Rodeos, 4Runners, Pathfinders, Montero/Raiders, etc. None of them did well in rollover tests. It took SUVs getting bigger and wider to finally end it.

There was a good long while there where activists and their fuckbuddies in the media used any excuse to slam the US auto industry and exaggerated to the point where they were pretty much just making shit up. Even the "unsafe at any speed" Corvair didn't deserve it's rep. At least not any more then the VW bug and Karmann Ghia who had the same "design flaws". Shit, at the time I don't think the Beetle even had a collapsible steering column. But, yeah, the Corvair is the one to worry about. Thanks Ralph, you giant pinko communist.

Upon further research, it appears that the Pinto situation was indeed an exaggeration, but the Bronco II was a whole different story:

Stability problems with Bronco II were noted during the design phase, as well as in the verification tests by 1981.[1] For example, the J-turn test was canceled during the testing procedures by Ford officials "out of fear of killing or injuring one of its own drivers."[4]Engineering modifications were suggested, but Ford officials declined the modifications because they would have delayed the marketing of the new vehicles.[4] Eight months before production began, Ford's Office of General Counsel collected 113 documents concerning the new vehicle's handling problems.[1] However, 53 of these test, simulation, and related reports about stability of the Bronco II "disappeared" in an "unusual document handling procedure" that forebode the lawsuits against Ford starting in the late-1980s.[1]

The Bronco II was dogged by reports that it was prone to rollovers.[5] Some of the headlines in 1989-90 included "NHTSA Investigates Bronco II Rollovers," Automotive News (March 20, 1989) "Magazine Gives Ford's Bronco II 'Avoid' Rating," The Wall Street Journal (May 8, 1989), and "Consumer Reports Criticizes Ford Bronco II's Handling," The Washington Post (May 18, 1989).

After analysis of SUV crashes of the Suzuki Samurai, the U.S. National Highway Traffic Safety Administration (NHTSA) opened a formal study of the Ford Bronco II in 1989.[6]There were 43 Bronco II rollover fatalities in 1987, compared with eight for the Samurai, but accident data in four states showed the Bronco II's rollover rate was similar to that of other SUVs, so the investigation was closed. NHTSA declined to reopen the investigation in 1997 after more Bronco II crashes.[7]

Another interesting story is when Nissan tried to buy back and crush every one of those weird-ass looking vans that they built back in the 80s. The Japanese-market vans were just fine, but since Americans always need to have bigger and more powerful engines, they tried to squeeze in an engine that was bigger that these vans were designed for, leading to lots of engine fires. It didn't help that these vans had a weird design that required you to remove the drivers seat in order to get to the engine. I think the only other time a manufacturer tried recall and crush every example of something was 100 years ago when Chevy built those copper-cooled engines.