The prospect of another trans-Atlantic merger surely doesn't surprise longtime employees and dealers who've already been part of Chrysler Corp., DaimlerChrysler, Chrysler LLC and Fiat Chrysler Automobiles. They've experienced the deception of a "merger of equals" and the relief of a merger born from bankruptcy.
Now, should Renault take FCA up on the proposal it went public with last week, the combined company would outrank Detroit's other two automakers and be part of a global alliance, with Nissan and Mitsubishi, that outsells every other automaker around the world.
After years of open discussions about FCA's interest in finding a partner and its courtship of General Motors, among others, "It was only a matter of time before they hooked up with someone," said Doug Wilson, who owns Collierville Chrysler-Dodge-Jeep-Ram in western Tennessee.
If the deal goes through, "My main concern, from a health-of-FCA standpoint, is that they continue to invest in new product," Wilson said. "We see what happened when they stripped cupboards bare and didn't invest in new product" under previous ownership. "It caused the collapse of the company."
Today, though, FCA approaches merger talks from a position of strength — primarily from the success of its Jeep and Ram brands — as the company seeks to fulfill former CEO Sergio Marchionne's dream of consolidation. Wilson and other dealers are optimistic about the prospect of a more efficient FCA that could collaborate with Renault on electrification, an area where FCA has lagged.
At the same time, dealers haven't forgotten about the ill-fated Daimler merger in 1998, unwound nine years later, and they're hoping FCA has learned from those mistakes. FCA says dealers should expect little to no change to their operations.
In a letter to dealers in the U.S. and Canada last week, Reid Bigland, head of U.S. sales, described the proposal as a "bold step that will dramatically change both companies and the automotive industry." He said the new company would tally worldwide sales of nearly 9 million vehicles annually with a "broader and more balanced global presence than either company on a standalone basis." The combined entity, Bigland said, would be a world leader in electric vehicle technologies along with premium brands, SUVs, pickups and light commercial vehicles.