Posted on November 27, 2019 by Kelly Wilk
FCA & Peugeot Merge to Produce Electric andSelf-driving vehicles
Green Means Go
By Kelly Wilk
There are some big waves being made in the automotive world as a merger between Fiat Chrysler Automobiles (FCA) and Peugeot, who are the European makers of Peugeot, Citroen, Opel and Vauxhall vehicles was announced this past October. This decision has resulted in a brand spanking new company that will be one of the four biggest automotive groups in the world and they are planning some big things!
The original carmakers have both agreed to form a company that will be a joint 50/50 arrangement, which will be owned by the shareholders. This merger will see their combined efforts work towards to technological and environmentally minded improvements. This new entity will also have the advantage of the 3.7 billion Euros saved annually as a result of the decision never to have plant closures.
There are other advantages however. As two pre-existing organizations they have combined their revenue to give this new entity an initial boost. And with a piggy bank stuffed with 170 billion Euros that is certainly a significant boost at that. It is not just however that they are joining their companies and pooling their resources they are also leading the way in a new direction for the automotive industry.
Their goal is to see more carmakers come together in order to further develop the technology to make more self-driving and electric vehicles. And as the push on affirmative action for climate change grows, I think we can all agree that this is both a positive and responsible direction for the automotive industry to travel in. They will also be listed on the New York, Milan and Paris stock exchanges, which will provide a more sturdy financial standing.
In fact it was Sergio Marchionne an Italian/Canadian businessman, already well known Former Chairman of the CNH Industrial and Maserati, as well as the Former CEO of Ferrari, FCA Italy and of course Fiat Chrysler Automotive, who had a dream for the automobile industry. It was looking towards the future to help create and see the fruition of a more collaborative and consolidated industry. Since his death in July 2018 he is reportedly remembered as a forthright, frank individual in business dealings as well as being a bit outspoken particularly when discussing negative issues related to his companies and the automotive industry at large. I think he would agree that this merger is a drive in the right direction.
This new company will operate under the influence of a Dutch parent company. They have not only pooled their resources but combined their boards. It will now consist of 11 elected members who will all individually be nominated by their prior company.
FCA and Peugeot will each nominate five members and the CEO of this newly formed entity will be Carlos Tavares of PSA. John Elkmann will continue his role as the FCA Chairman. Going forward they will work together to draw up an agreement as to the specific details but it is certain that both companies are committed to this merger.
The only thing left to decide is what this new collaborative, cohesive company will be called. It gives me a chuckle to think of them passing a box around the board meeting, collecting prospective titles, which seems very grass roots to me. However perhaps they will, as they have to start somewhere I suppose. I for one will be poised to see what new innovations and forward environmental strides are created as a result. As well I will be excited to see what kind of new and climate conscious cars they create of which I hope to drive one day beside my proud eight year old Earth Ranger son. Their success will ultimately be determined by what kind of local and global contributions they will make and with a new and socially and environmentally conscious generation at their door I hope they will have a lot of customers!