Over the past weekend, the $52 billion deal was done. After over a year of negotiations and public commitments, FCA US, LLC has merged with PSA Groupe. Together they now stand as Stellantis NV, the world’s fourth largest automaker, with an industry-leading lineup of 14 brands. As shares of the new company began to trade in Milan and Paris this morning, the era of Stellantis is officially upon us.
The merger between PSA and FCA comes as the industry as a whole begins its pivot towards electrification and autonomy. The combined coffers of FCA and PSA Groupe now put Stellantis in a position to rival other industry giants like General Motors and Volkswagen, something neither company had the cash to do individually. In fact, Stellantis leadership believes that the move will save the new automaker a total of $5.9 billion annually via platform and powertrain sharing among other best practices. The executives have also been quick to note that these savings have not been factored as a result of closing production facilities.
Speaking of executives, Stellantis NV brings with it an entirely new executive board. PSA was responsible for appointing six of the top 11 executives at the company, including new CEO Carlos Tavares. Tavares has been heralded as a shrewd but effective CEO since taking control of PSA in 2014, known for bringing underperforming brands back up to task. FCA’s Mike Manley did not receive a position on the executive board of Stellantis, but will retain oversight of North and South American business operations.
Tavares will take over the unenviable position of dealing with the massive overlap that now exists in the Stellantis portfolio. Furthermore, FCA brought several underperforming brands along with it, particularly Chrysler, Dodge, Fiat and Maserati. The slow sales figures of these brands, as well as their aging portfolios, has left many experts questioning their long-term viability within Stellantis. The new automaker has remained quiet about potential closures at this point, but Tavares reputation proceeds him. If these brands do survive the early days of the merger, they may begin to look very different than they do today. More successful brands like Jeep and Ram be the cornerstone of Stellantis’ business operations in the States.
The future of Stellantis NV will be watched with great interest. Shares of the company already rose 7.5 percent on the European stock exchange today according to a report by CNBC. The company will begin trading on the New York Stock Exchange tomorrow following the Martin Luther King Jr. Day closure. From there, we will all have to wait for the first official moves of the Stellantis era. Here’s to hoping we don’t have some of America’s most iconic brands in the fray.