2015 Chrysler 200 C on 2040-cars

Auto blog

China-FCA merger could be a win-win for everyone but politicians

NEW YORK — Fiat Chrysler boss Sergio Marchionne has said the car industry needs to come together, cut costs and stop incinerating capital. So far, his words have mostly fallen on deaf ears among competitors in Europe and North America. But it appears Marchionne has finally found a receptive audience — in China. FCA shares soared Monday after trade publication Automotive News reported the $18 billion Italian-American conglomerate controlled by the Agnelli family rebuffed a takeover from an unidentified carmaker from the Chinese mainland. As ugly as the politics of such a combination may appear at first blush, a transaction could stack up industrially, and perhaps even financially. A Sino-U.S.-European merger would create the first truly global auto group. That could push consolidation to the next level elsewhere. Moreover, China is the world's top market for the SUVs that Jeep effectively invented, so it might benefit FCA financially. A combo would certainly help upgrade the domestic manufacturer; Chinese carmakers have gotten better at making cars, but struggle to build global brands, and they need to develop export markets. Though frivolous overseas shopping excursions by Chinese enterprises are being reined in by Beijing, acquisitions that support the modernization and transformation of strategic industries still receive support, and the government considers the automotive industry to be strategic. A purchase of FCA by Guangzhou Automobile, Great Wall or Dongfeng Motors would probably get the same stamp of approval ChemChina was given for its $43 billion takeover of Syngenta. What's standing in the way? Apart from price (Automotive News said FCA's board deemed the offer insufficient) there's the not-insignificant matter of politics. Even as FCA shares soared, President Donald Trump interrupted his vacation to instruct the U.S. Trade Representative to look into whether to investigate China's trade policies on intellectual property. Seeing storied Detroit brands like Jeep, Chrysler, Ram and Dodge handed off to a Chinese company would provoke howls among Trump's economic-nationalist supporters. It might not play well in Italy, either, to see Alfa Romeo and Maserati answering to Wuhan instead of Turin — though Automotive News said they might be spun off separately. Yet, as Morgan Stanley observes, "cars don't ship across oceans easily," and political considerations increasingly demand local manufacture of valuable products.

UAW may be key to forced FCA merger with GM

Sergio Marchionne doesn't give up on a business deal easily. While outwardly not much has recently been said about FCA's attempted merger with General Motors, Marchionne might be hoping to garner a powerful, new ally that could help break things wide open. The United Auto Workers retiree health care trust is the single largest shareholder of GM with 8.7 percent of the stock, and having its support would certainly improve FCA's position in getting a deal done. "Whatever happens in terms of consolidation, it would never be done without the consent and support of the UAW," Marchionne said when FCA recently began contract talks with the UAW, The Detroit News reports. The boss is also allegedly on good terms with the union president Dennis Williams. Still, using the organization for a hostile takeover could be very difficult because of the way its votes are structured. Other activist investors might already be on board, though. Marchionne believes that consolidation in the industry is vital because automakers are investing to create the same technologies. A GM/FCA merger still has many roadblocks, though, including the fact that Marchionne's company is smaller than GM. From a regulatory perspective, the size of the merged company could raise serious anti-trust concerns among regulators, according to The Detroit News. There's also the concern for lost jobs from redundant work with the two combined businesses. Even if the UAW angle doesn't work out, there are contingency plans afoot for other merger targets. According to The Detroit News speaking to anonymous insiders, FCA bigwigs have a meeting in London on Thursday to take a close look at other options. In addition to GM, they are investigating possible deals with Volkswagen and the Renault-Nissan Alliance. In the past, PSA Peugeot Citroen and multiple Asian automakers have also been brought up as partners, and UBS has reportedly been providing financial advice on what to do.

IIHS study finds minivans are unsafe for second-row passengers

The Insurance Institute for Highway Safety (IIHS) updated its moderate overlap front crash test in late 2022, and it found that four minivans struggle to protect second-row passengers. The agency stresses that minivan manufacturers need to prioritize safety for the rear occupants. While the minivan is no longer a common sight in driveways across America, it remains relatively popular among buyers with kids and gear to haul around. The IIHS tested four models: the Chrysler Pacifica, the Kia Carnival, the Toyota Sienna and the Honda Odyssey. These vans were put through an updated test that places a dummy the size of a small woman or a 12-year-old child in the seat directly behind the driver. IIHS explains that, for a vehicle to earn a "good" rating, there can't be an excessive risk of injury to the head, neck, chest or thigh. None of the four minivans achieved that distinction; the Pacifica, the Carnival and the Sienna got a "marginal" rating, while the Odyssey scored a "poor" rating. IIHS also points out that, with the exception of the Sienna, these vans lack a seatbelt reminder for the second-row passengers. Chrysler Pacifica View 5 Photos "The restraint systems in all four vehicles leave the second-row occupant vulnerable to chest injuries, either because of excessive belt forces or poor belt positioning. That's concerning because those injuries can be life-threatening," said Jessica Jermakian, the IIHS vice president of vehicle research, in a statement. IIHS stresses, in spite of these results, the back seat remains the safest place for children to travel in. In the Sienna, the rear dummy "submarined" (or slid forward) beneath the lap belt while the shoulder belt moved toward the neck. In the Carnival and the Pacifica, the seatbelt put too much force on the dummy's chest. IIHS adds that, alarmingly, the Pacifica's side curtain airbag did not deploy during the crash test and that the forces exerted on the dummy's neck were high in the Carnival. In the Odyssey, the forces exerted on the head and on the neck were even higher, and the dummy's head came too close to the front seatback in spite of the seatbelt. On a brighter note, all four vans earned a "good" rating for front-passenger protection. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Chrysler Honda Kia Toyota Safety Minivan/Van IIHS crash test Insurance Institute for Highway Safety