Fiat Chrysler Automobiles and French automaker Renault are in talks that could result in a tie-up of their operations.
The Wall Street Journal reported Saturday that discussions involve a “wide-ranging tie-up that could include joining large portions of their businesses.”
FCA is declining comment.
A source familiar with the talks confirmed them to the Free Press and indicated they had “ratcheted up” recently.
The Journal, noting that FCA is worth $20 billion and Renault $17 billion, indicated that a deal could come soon, but that talks could also fall apart. Renault has been involved in a partnership with Nissan and Mitsubishi, but the drama involving the ouster of and charges of financial misdeeds against the former head, Carlos Ghosn, has left its future uncertain. Ghosn has denied wrongdoing.
It’s unclear how any arrangement with Renault would affect U.S. operations, including those in Detroit where FCA is planning a massive expansion to retool Jefferson North Assembly and turn the idled Mack Engine complex into an assembly plant for SUVs.
Fiat’s small car fail: Fiat hoped to spark America’s small-car revival. Instead, it lost out to SUVs
FCA has long been the subject of speculation for a potential merger or acquisition and the company has partnerships with companies including Waymo related to autonomous vehicles.
FCA CEO Mike Manley has said the company can stand on its own, but that he is open to arrangements that would strengthen it.
Prior to the heightened Renault talks, PSA Group had been the subject of numerous reports about a possible tie-up. Manley’s predecessor, the late Sergio Marchionne, had made a case for industry consolidation in 2015 with his “Confessions of a Capital Junkie.”
Automakers are facing a challenging time as they pour resources into developing electric and autonomous vehicle technology while the market in the United States is in a post-peak period. The shift away from small cars in the United States toward SUVs and trucks and a down market in China have also had repercussions.
Fiat Chrysler is announcing a $4.5 billion investment plan the carmaker says will increase its workforce in Detroit and the surrounding suburbs by about 6,500 jobs (Feb. 26)
Contact Eric D. Lawrence: email@example.com. Follow him on Twitter: @_ericdlawrence
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