France is indicating it will be “particularly vigilant” as to the future of the country’s industrial footprint following this morning’s (31 October) confirmation PSA and FCA plan a 50:50 merger.
Should the deal proceed, it will create the fourth largest global OEM in terms of annual unit sales of around 8.7m vehicles and combined revenues of EUR170bn (US$190bn).
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However, the mega-merger has already provoked jitters among the combined huge workforces, despite soothing noises emanating from PSA in Paris the deal would not entail plant closures.
The news is now being digested by unions in France, the UK, Italy and the US among other countries, but has raised disquiet from British union, Unite, which has said the proposal is “deeply unsettling,” particularly as it comes attached to ever-present uncertainty surrounding Brexit.
It is the French government however, which, with a 15% stake in PSA, has sought to soothe labour organisation nerves first, perhaps mindful of the country’s reputation for taking industrial action.
“As it has already indicated, the government will be particularly vigilant in preserving the industrial imprint in France, localisation of decision centres and confirmation of the new group about creating a European electric battery subsidiary,” said a statement from the French Finance Ministry in Paris.
“This operation will give the two groups the necessary size to carry out the indispensable investments in the face of energy transition and electrification challenges, as well as shared, autonomous and connected driving.”
The merger proposal will be submitted to the information and consultation process of the relevant employee bodies and will be subject to customary closing conditions, including final board approvals of the binding Memorandum of Understanding and agreement on definitive documentation.
“France should be proud of its automotive industry, which has shown its research capacity and technological innovation, in particular when it comes to electric and hybrid fields,” said French Finance Minister, Bruno Le Maire.
“In this new global situation, the two carmakers, with their respective partners, would place themselves among the four largest [car] manufacturers in the world.”
PSA and FCA estimate there will be EUR3.7bn estimated annual run-rate synergies without any plant closures resulting from the transaction.
Run-rate synergies are derived principally from a more efficient allocation of resources for large-scale investments in vehicle platforms, powertrain and technology and from the enhanced purchasing capability inherent in the combined group’s new scale.
The synergy estimates are not based on any plant closures.
More: PSA and FCA plan to merge
