Fiat Chrysler and Peugeot are merging — an Italian-French-American car giant is born
Long distance relationship... Europe's Peugeot and Fiat Chrysler are living it. The pair is reportedly merging for $48.8B to create the 4th biggest car company on Earth. Peugeot is French, Fiat is Italian, and Chrysler is American. The 3 surprises from studying this thing abroad:
- Peugeot (founded 1810) was the 1st to put solid rubber tires on a gas-powered car.
- Fiat (1899) owns a dozen brands, from Maserati to Dodge — but the profit puppies driving its $$$ are Jeep SUVs and Ram trucks, not adorable Italian mini-machines.
- Chrysler (1925) is one of Detroit's "Big 3" carmakers, but is now owned by Fiat, which snagged it post-Chrysler bailout/bankruptcy in 2009.
This fulfills a dream... Former CEO Sergio Marchionne’s dream. The godfather of modern automobile strategy passed away last year, but he called shotgun on merging whenever he could:
- 2004: When Fiat's small cars were losing $1.1M a day, Sergio took over the company as CEO.
- 2009: He got Fiat on its feet and then took over Chrysler.
- 2015: He tried (but failed) to merge with GM.
If you ain’t merging, you’re dying... For years, Sergio called on the car industry to consolidate. He predicted and watched car companies go bankrupt in the '08-'09 Recession. He recognized that people stop buying cars mid-recession, so a merged "team" of car companies can better survive. Now Peugeot and Fiat Chrysler can own 1/4 of the European car market. Together.