Fiat Chrysler, Renault confront challenges post-merger collapse

Fiat Chrysler and Renault are back to facing the looming challenges to their respective businesses after merger talks between the two carmakers broke down earlier this month.

The deal would have created the world’s third largest auto manufacturer and combined Chrysler’s lucrative Jeep and Ram pickup truck brands with Renault’s advancements in emissions-free and self-driving vehicles.

Negotiations between the two firms, however, collapsed amid resistance from the French government and concerns from Nissan, which has a long-standing alliance with Renault.

Now, the respective companies are moving to tackle some of the issues that a combination could have helped solve, or at least momentarily put out of the spotlight.

Chrysler on Monday signed an agreement with Aurora – a firm founded by former Google and Tesla executives – to partner to manufacture and deploy self-driving cars. Under the proposed pairing, Chrysler would put the Aurora Driver technology, the firm’s autonomous car platform, into its fleet.

The arrangement “complements and enhances” Fiat’s ongoing approach to self-driving cars, CEO Mike Manley said in a statement. Chrysler is currently providing Google’s Waymo with minivans that the company is outfitting with its own self-driving technology.

Apart from a more aggressive strategy on autonomous vehicles, Manley must work to turn around the Italian-American carmaker’s business in China and Europe.

Sales in Asia fell 8 percent in the first quarter of 2019, as shipments fell 30 percent. European sales fell 3 percent in the period.

Chrysler is also working to boost sales of its luxury models. Revenue from the Maserati line, for example, dropped 38 percent last quarter.

Meanwhile, Reid Bigland, Chrysler’s head of sales in the U.S., recently filed a lawsuit against the firm accusing it of cutting his pay after cooperating with a federal investigation into the company. Bigland is still employed by Chrysler.

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What's key for Renault is trying to navigate its partnership with Nissan after the departure of former chairman Carlos Ghosn, who led the alliance between the two firms and was arrested amid allegations he used company funds for personal use.

Tensions with Nissan are rising, however, after Renault informed the Japanese carmaker that it would abstain from voting on a measure that would launch new standing committees, a key aspect of the plan to overhaul its governance operations in the wake of the Ghosn scandal.

“Nissan finds Renault’s new stance on this matter most regrettable, as such a stance runs counter to the company’s efforts to improve its corporate governance,” the Japanese automaker said in a statement.


The proposal is slated to be voted on at Nissan’s annual meeting later this month.

Given Renault’s 43 percent ownership stake in Nissan, however, the measure cannot pass without support from the French firm.