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Wednesday, 18 December 2019 19:51

What We Know About US Jobs and Other Details of Fiat Chrysler, PSA Merger

Written by Breana Noble, The Detroit News

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Fiat Chrysler Automobiles NV and French automaker Groupe PSA said their boards unanimously supported a binding agreement to merge and create the world's fourth-largest automaker.

The deal is one step further than Fiat Chrysler got earlier this year with Renault SA, another French carmaker. The combination of PSA and FCA is expected to provide cost savings, create a hedge against cyclical downturns and have the scale to invest and compete in an electric and self-driving future.

 

Although the companies are calling the deal a 50-50 merger, PSA would hold a board majority and appoint six of the 11 board members. That includes PSA CEO Carlos Tavares, who is expected to lead the combined company.

 

Here is what else to know about the deal:

 

What comes next?

 

With the binding agreement signed, the automakers can pursue obtaining antitrust and regulatory approval from the companies in which it operates. They also must receive approval from their shareholders. The process is expected to take 12 to 15 months.

 

"We don’t feel we have any concerns with antitrust" laws, Tavares said. "We've reviewed this topic and are very comfortable we have no problem on antitrust" regulations.

 

What is the name of the new company?

 

The name of the new company has not yet been announced. Information provided to investors refers to the entity colloquially as "DutchCo," but Fiat Chrysler representatives assured that is not the official title.

 

Would Fiat Chrysler retain its headquarters in Auburn Hills?

 

The current Italian American automaker is incorporated in the Netherlands, headquartered in London and retains major operations in Auburn Hills and Turin, Italy, the home of the Fiat brand. Likewise, the combination of FCA and PSA would be domiciled in the Netherlands and continue to have operational headquarters in Auburn Hills, Paris and Turin.

 

Are Fiat Chrysler employees' jobs in jeopardy?

 

Executives repeated statements from October that there would be no plant closures or loss of manufacturing jobs as a result of the transaction. United Auto Workers Vice President Cindy Estrada said the union hopes the combination will benefit its members and it is looking forward to hearing more details.


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