This is really happening.
Fiat Chrysler Automobiles (FCA) has been courting French companies for some time. Recently, the announcement that FCA would be merging with Peugeot's parent company, PSA, to become the world's fourth-largest automaker was greeted with excitement. Now, Reuters is reporting that PSA has told its employees the automaker would sign a binding merger agreement in the coming weeks. According to Reuters, the news comes through two separate communications through internal channels. According to those communications, the two auto groups told employees that more than 50 people would be putting the merger details together.
Nine working groups have been established to thread the needle of the 50/50 merger led by FCA Group Treasurer and Global Head of Business Development David Ostermann, and PSA Executive Vice President Program and Strategy Olivier Bourges.
There will be issues to negotiate, and worries for the merger have included European Union fuel efficiency rules, the threat of job cuts due to overlaps and inefficiencies, as well as the wealth of shareholders with interests. Those shareholders include French and Italian governments, Chinese shareholders, as well as the Agnelli and Peugeot families.
The most recent threat is GM's jaw-dropping lawsuit that was initiated last week. The lawsuit alleges racketeering and that FCA bribed Union Of Autoworkers (UAW) officials to get better terms using collective bargaining with their employees. According to GM, that gave FCA an unfair advantage and is causing GM "substantial damages" as a result. Most recently, we saw UAW go on a strike with GM that resulted in the C8 Corvette being delayed.
FCA Chairman John Elkann has brushed off the lawsuit, and, in a statement, FCA said: "We intend to vigorously defend against this meritless lawsuit and pursue all legal remedies in response to it." Many, including FCA itself, have noted the timing of GM's lawsuit regarding the PSA merger. Elkman says he's confident the end of the year will see a binding merger deal with PSA.