In spite of the RICO lawsuit intended by General Motors that continues to shake the automotive world, Fiat Chrysler Automobiles is close to signing a merger agreement with PSA.
Both groups told their employees that the papers will be signed in a few weeks, reports Reuters, quoting information received from representatives of the two automakers, and that more than 50 people are involved in the tie-up.
It appears that 9 working groups have already been established, and holding the reigns for FCA is David Ostermann, Treasurer and Global Head of Business Development, whereas PSA is led by Olivier Bourges, Executive Vice President for Program and Strategy.
Read: White House Wary Of FCA-PSA Deal Due To China’s Dongfeng Involvement
The FCA-PSA merger will help the two major players expand their reach and cut down their production costs. The unification will also make them the world’s fourth largest automotive group, after Volkswagen, Renault-Nissan-Mitsubishi and Toyota.
Aside from the positive aspects, some voices, including labor unions and government officials, are concerned that certain European factories may be walking on thin ice. It is reported that the about-to-be-formed group would face a spare production capacity of almost 6 million cars due to a slow market, especially in the small segments across the Old Continent, which might lead to job losses.
Vulnerable plants are, according to reports, Vauxhall’s (PSA) Ellesmere Port and Luton factories in the UK, and Fiat’s (FCA) Kragujevac plant in Serbia. Meanwhile, FCA might adopt PSA’s more eco-friendly power units to meet upcoming emissions regulations in Europe, which puts pressure on their engine factories in Italy and Poland too.
