The Stellantis merger may have unfortunate consequences.
The final shareholder vote for the $38 billion FCA-PSA Group merger is happening today and it's expected to pass with no issues. The result will be a significant step in creating the world's fourth-largest automaker, Stellantis. When this is all made official by the end of March, Stellantis will include iconic US brands like Jeep, Dodge, Chrysler, and Ram. Fiat, Alfa Romeo, and Maserati are also part of the mix, brands that helped create the combined Fiat Chrysler Automobiles. Peugeot, Citroen, and Opel, among others, are among PSA's contributions to the new conglomerate.
But soon-to-be Stellantis CEO Carlos Tavares has a reputation for cost-cutting. Money-losing vehicles and projects, under his watch, are typically given the axe. And now the Associated Press reports Tavares could decide the Chrysler brand is no longer worth keeping.
Currently, its lineup consists of just three models, two of which are minivans: The Pacifica and Voyager, and one sedan, the aging 300. Inside sources indicate Tavares has no intention of touching the highly profitable Jeep and Ram brands for the foreseeable future. Dodge, whose own lineup also consists of only three models for 2021 (the Journey and Grand Caravan have been dropped), is in much better shape because those three vehicles, the Challenger, Charger, and Durango, still sell in solid numbers.
But Chrysler is a different story. Its US sales were off 19 percent through last October and there are currently no new models on the horizon.
Alarm bells in the US have already begun ringing. Late last month, Frank B. Rhodes, Jr., the great-grandson of Chrysler founder Walter P. Chrysler, sent a letter to FCA management urging them to reconsider the merger out of fear it will hurt American jobs and damage certain brands, such as Chrysler. His proposal calls for a new company called Chrysler-Dodge-Jeep-Ram Corporation that doesn't include PSA. Rhode's proposal stands no chance.
Tavares is not expected to start giving slow-selling vehicles (and brands) the axe immediately, but unless there's a plan being formulated for a complete Chrysler overhaul that would need to include EVs, its future is looking grim.