Jun 7, 2019

Another marriage scuttled, Fiat Chrysler forges ahead

Illustration: Sarah Grillo/Axios

This week's abrupt end to merger talks between Fiat Chrysler and Renault might be cause for panic as other carmakers pair off to try to deliver the next generation of autos. But given how quickly Fiat Chrysler (FCA) bailed out of the deal when it hit a political snag, the company doesn't seem particularly desperate.

The big picture: The cost of developing electric and autonomous vehicles is daunting, it's true, but a full-fledged merger isn't the only way to share the burden. In the seismic shift toward Autos 2.0, the smart play could be simply keeping your options open.

Driving the news: In a surprise announcement Wednesday evening, FCA withdrew its offer to merge with Renault, scuttling a deal to create the world's third-biggest automaker just two weeks after it was announced.

  • FCA Chairman John Elkann is said to have lost patience with delays sought by the French government, which owns 15% of Renault and wanted time to confirm that its longtime alliance partner, Nissan, would support the deal.
  • Bloomberg offered an excellent tick-tock with details on the shocking collapse.
  • “It’s as important to walk away from the table as it is to sit down,” FCA's former CEO Sergio Marchionne once said, per Bloomberg, advice Elkann appears to have abided.

Flashback: Marchionne long advocated for industry consolidation, arguing global scale was the only way to offset what he saw as a wasteful duplication of engineering efforts.

But disruption is coming fast: 100-year-old carmakers are now competing with tech giants and Silicon Valley startups, creating new risks — but also new opportunities for cross-pollination.

Fiat Chrysler has done a decent job so far leveraging such arrangements, Gartner mobility analyst Mike Ramsey tells Axios. "Why does the car company have to own it?"

What's next: For electric cars, FCA could easily team up with a company like Volkswagen, Navigant Research's Sam Abuelsamid tells Axios.

The bottom line: There are other ways FCA can access the necessary technologies while maintaining its independence and coddling its crown jewels: Jeep and Ram.

Go deeper

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 a.m. ET: 5,945,711— Total deaths: 365,535 — Total recoveries — 2,516,951Map.
  2. U.S.: Total confirmed cases as of 10 a.m. ET: 1,747,087 — Total deaths: 102,836 — Total recoveries: 406,446 — Total tested: 16,099,515Map.
  3. Economy: America's unfinished business.
  4. Supreme Court: Chief Justice Roberts sides with liberals in denying challenge to California's pandemic worship rules.
  5. Public health: Hydroxychloroquine prescription fills exploded in March.
  6. 2020: North Carolina asks RNC if convention will honor Trump's wish for no masks or social distancing.
  7. Business: Fed chair Powell says coronavirus is "great increaser" of income inequality.

America's unfinished business

Illustration: Sarah Grillo/Axios

The fury over George Floyd's killing is erupting as the U.S. faces a looming wave of business bankruptcies, likely home evictions and a virus pandemic that will all disproportionately hit African Americans.

Why it matters: What these seemingly disparate issues share in common is that they emanate from systemic abuses that calls to action and promised reforms have yet to meaningfully address.

Deaths without consequences

Community organizations and activists demand police accountability at a rally in Grand Central Terminal to commemorate the 5-year anniversary of Mike Brown's death by Ferguson Police Officer Darren Wilson. Photo: Erik McGregor/Getty Images

Seven years after the launch of the Black Lives Matter movement, it's still rare for police officers to be charged in the deaths of African Americans — and even more rare for an officer to go to jail.

The big picture: The Minneapolis police officer who was captured on video kneeling on George Floyd's neck has been charged with third-degree murder and manslaughter — which is already a step beyond the consequences other police officers have faced. But it's no guarantee that he will face jail time.