Fiat Chrysler and Peugeot approve merger to create global auto giant
Stellantis will employ 400,000 and will be the world's fourth-largest carmaker
Shareholders of Fiat Chrysler Automobiles and PSA, the French maker of Peugeot, Citroen and Opel cars, voted Monday to merge in an effort to acquire the scale necessary to survive in an industry gripped by technological change and pummeled by the pandemic.
The new company, to be called Stellantis, will employ 400,000 people and include the Jeep, Ram Trucks, Alfa Romeo and Maserati brands. It would be the world's fourth-largest carmaker, after Toyota, Volkswagen and the Renault-Nissan-Mitsubishi Alliance, based on vehicle sales during the first nine months of 2020.
Executives of Fiat Chrysler and PSA agreed at the end of 2019 to merge and have been working out the details and securing regulatory approval since then.
Together, the two companies believe they stand a better chance of surviving a transition to electric vehicles, which is happening faster than most analysts predicted.
"We are living through a profound era of change in our industry," John Elkann, chairman of Fiat Chrysler, told shareholders by video, drawing comparisons with Fiat's founding at the dawn of the automobile age. "We believe the coming decade will redefine mobility as we know it."
The new company, which will be based in the Netherlands with large operations in France, Italy and the United States, will face major challenges. Neither Fiat Chrysler nor PSA has a strong presence in China, the world's largest car market, and they have been slow to introduce electric vehicles.
The two companies have some assets, such as the popular Jeep and Ram brands, said Peter Wells, a professor at Cardiff Business School in Wales. Fiat and PSA delivery vans are selling briskly in Europe as people buy more goods online.
But Fiat Chrysler and PSA also have grave problems, Wells said, such as underused assembly lines, which will make it difficult for them to fulfill promises to unions and the French government, a major shareholder, not to close factories.
PSA and Fiat Chrysler "have a bunch of structural problems that aren't going to go away easily," Wells said.
Bruno Le Maire, the French economics and finance minister, and Stefano Patuanelli, his Italian counterpart, said they "warmly welcome" the merger, which will create a "new European champion."