Automobile. PSA shareholders approve Fiat and Chrysler merger


Avoid culture shock

'We are witnessing the largest merger in the automotive industry since its inception,' said Louis Gallois, outgoing chairman of the PSA board of directors, in Les Echos (January 4th issue). A merger 'between equals' according to the organizers: 50/50 in terms of capital and with a small advantage in the supervisory board for PSA shareholders.

Everything remains to be done now. And the questions are not missing. Working groups (several hundred executives from the two companies) work behind the scenes to convert the mega-merger into the daily reality of the employees of the almost dissolved PSA and FCA groups and to avoid the conflict of cultures.

'PSA is a real engineering culture that turns to technology, while the FCA represents more Anglo-Saxon values ​​and turns to entrepreneurship,' sums up Louis Gallois in day-to-day business. “We shouldnt get rid of these two cultures, but get the best out of both. ''

The thorny complementarity of brands

In other words, Carlos Tavares, responsible for the operational management of the new automobile company - the fourth in the world with 8.7 million vehicles sold per year - cut his job for him.

One of the main topics on his desk is the implementation of the announced synergies (convergence of platforms, purchasing from suppliers, marketing, etc.). Initially estimated at 3.7 billion euros in the preliminary agreement, the amount was revised upwards to 5 billion euros.

Stellantis fourteen-member brand catalog also raises questions that risk some to compete. Managing their complementarity is not the slightest challenge.

Heading for Health Crisis-Related Closures?

Finally, there are the industrial and social aspects. When they announced their engagement in autumn 2019, PSA and FCA promised that there would be 'no plant closure in connection with this transaction'. Will there be one (or more) related to the global health crisis that is rearranging the cards in the economy?

On the other side of the Alps, however, the usage rate of the seven Italian Fiat-branded factories is no more than 60{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}, according to Phitrust Fund, a minority shareholder of PSA. Industrial restructuring therefore seems inevitable. It remains to be seen whether the principle of ship communication between France and Italy will be activated.