Fiat Chrysler merges with PSA Group to become Stellantis



(January 19, 2021) Fiat Chrysler Automobiles and France-based PSA Group completed their $52 billion tie-up and formally merged into Stellantis on Saturday. Fiat Chrysler Automobiles is no more. The merger creates the fourth largest automaker in the world with combined annual sales of around 8.1 million vehicles and deep enough pockets to fund the shift to electric driving and take on bigger rivals Toyota and Volkswagen Group.

It took over a year for the Italian-American and French automakers to finalize the deal, during which the global economy was upended by the COVID-19 pandemic. They first announced plans to merge in October 2019.

It's the third time in as many decades that Chrysler will be in the hands of another foreign entity. Stellantis, for now, retains an industry-leading 14 brands from Jeeps and Rams to Fiat minicars and Peugeot family cars and SUVs. Alfa Romeo, DS Automobiles and Maserati play in the luxury and premium segments. There's no Stellantis brand — that's just the name of the holding company.

The combined company's headquarters will be in Amsterdam, though it retains major operations in Auburn Hills, Paris and Italy. Stellantis became trading today at the New York Stock Exchange.

Stellantis expects to save $5.9 billion annually related to condensing platforms and powertrains, greater purchasing power and redundancies in sales, marketing, quality, logistics and supply-chain management. Executives have emphasized none of the forecasted savings will result from closing plants.

PSA CEO Carlos Tavares is heading the new Stellantis automaker. The Portugal native has a reputation as a cost-cutter, but also as a turnaround specialist for his leadership at PSA since 2014. When PSA acquired General Motors Co.'s European brands in 2017, Opel and Vauxhall were profitable again in 18 months after having lost money for decades. That effort did include 9,000 early retirements and voluntary layoffs.

Fiat Chrysler CEO Mike Manley will remain with Stellantis, helming operations in North and South America where Fiat Chrysler historically has been successful. PSA currently does not have a retail presence in the United States or Canada.

Sources: News reports