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PSA shares rise following FCA's breakup with Renault

Shares in Groupe PSA, parent company of automakers Peugeot, Citroen and the DS brand, rose on Thursday as analysts considered the possibility that Fiat Chrysler could turn back to PSA after withdrawing its $35 billion merger offer for Renault. "Both parties have acknowledged the need for scale or [mergers and acquisitions] and may pursue other opportunities. If Nissan was an obstacle (to an FCA-Renault deal) PSA-FCA discussions could resume," wrote brokerage Jefferies. Back in March at the Geneva Motor Show, rumors started swirling that PSA was interested in a potential merger with FCA. Mike Manley, who took over at the helm of Fiat Chrysler following the death of Sergio Marchionne, had indicated a willingness to look into potential partnership options. Of course, that was all before FCA proposed a merger with Renault — with that deal now off the table, attention naturally turns back to PSA, which is also based in France. "We expect both shares to react negatively but see FCA having wider strategic options and Renault shares more downside risk near-term," said Jefferies. According to Reuters, PSA shares were up 1.5% at the time this was published, making it the top-performing stock on France's benchmark CAC-40 Index. Renault saw its shares slump 7%. Shares for FCA fell 3% in early trading on the Milan Stock Exchange. Considering that FCA said in its statement confirming the withdraw of its merger offer with Renault that "political conditions in France do not currently exist for such a combination to proceed successfully," we have to wonder how keen the company is to begin negotiations with another French automaker like PSA. Those thoughts were similarly voiced by Bernstein Research analyst Max Warburton, who said (via Forbes), "Expect PSA to rise on unrealistic hopes it may be FCA's next date." Earnings/Financials Chrysler Fiat Mitsubishi Nissan Citroen Peugeot Renault FCA renault-nissan

Fiat Chrysler Australia executive in trouble over misuse of company funds

While the merger to create FCA was coming together, its managing director for Australia, Clyde Campbell, was allegedly racking up 30 million Australian dollars ($23.1 million) in spending for himself, family, and friends. Now, the former boss is facing a court case from the automaker's legal team for the purported misappropriation. Among the more opulent expenses that Campbell allegedly put on Chrysler's tab included a 40-foot yacht worth the equivalent of $308,000 and lavish Christmas parties for workers, according to The Age. Despite being required to only travel in economy class and get permission for international travel, he also reportedly racked up the equivalent of over $413,000 travel expenses. "The more we dug, the more we found," said an unnamed source to The Age. Campbell came to power in Australia as a general manager for DaimlerChrysler, and became managing director in October 2010. He was reportedly a close friend with former Mercedes-Benz USA CEO Ernst Lieb. After Lieb lost his wrongful dismissal lawsuit, Campbell allegedly helped his friend's partnership in an Aussie auto dealer by using FCA funds for financial support totaling the equivalent of about $3 million. All of this came to light when Pat Dougherty came over from the US to be president and CEO of FCA Australia in December 2014. The staff spilled the full story on Dougherty's first day. "I walked into his office and let it all out. I don't think he knew what hit him," another source said to The Age. A team of forensic accountants was brought in to investigate. The reason that this took so long to discover was that no one was paying attention. First, sales in Australia were growing under Campbell. Also, "in my opinion, back in Michigan, head office didn't have its eyes on the road. They only had eyes on the Fiat deal," an insider said to The Age. That confluence essentially provided the perfect storm for this huge spending. News Source: The AgeImage Credit: Giuseppe Cacace / AFP / Getty Images Government/Legal Chrysler Fiat lawsuit FCA

FCA eliminates just under 2,000 supplemental contract workers due to coronavirus constraints

Car companies have jumped in quickly to help combat coronavirus. They’re even beginning to manufacture some of the badly needed medical supplies, like ventilators and masks. However, with stay-at-home orders sweeping across the nation and folks practicing social distancing, automotive sales and manufacturing have quickly dried up in North America. That leads us to todayÂ’s news coming out of FCA. A company spokesperson told us that approximately 2,000 supplemental workers (a subcategory of the companyÂ’s many contract workers) are being laid off. HereÂ’s the official statement from FCA: “In light of the challenges created by the COVID 19 situation, and the various ‘stay at homeÂ’ orders from multiple states, a number of development projects within FCA have been temporarily put on hold. "As a result of this, subcontract companies who were providing external support to a number of these projects have been asked to temporarily suspend their activities as we reprioritize certain initiatives and projects. We will continue to monitor the situation with the intent to return to normal activity as soon as the situation allows.” FCA made it clear in our communications with the company that it is not terminating all contract workers, nor is it terminating any employees of the company itself. The rationale here is that certain development work is on pause, so those who were contracted to be a part of that work are now out. We're told that those workers are in white-collar functions, not manufacturing jobs. We asked FCA if it had plans to reinstate all of the affected workers once the coronavirus crisis has passed, but received no commitment either way. “At this point weÂ’re going to continue to monitor the situation,” a company spokesperson told us. Questions still remain when it comes to the stimulus package moving through Congress right now as it pertains to the automotive industry. FCA says itÂ’s currently studying the bill, but hasnÂ’t offered up a comment on the situation yet. We havenÂ’t heard of any similar cuts happening at Ford or GM yet, but now that FCA has made a move, weÂ’ll be on the lookout for more. Hirings/Firings/Layoffs Chrysler Fiat coronavirus