Say goodbye to Fiat Chrysler Automobiles. Say hello to Stellantis.
On Saturday, FCA and PSA Peugeot merged to form the new company, which is now the fourth largest automaker in the world with 14 vehicle brands under its name.
That includes Chrysler, Jeep, Ram and Dodge, along with Peugeot’s portfolio of vehicles such as Citroën, DS, Opel and Vauxhall.
FCA as an entity now no longer exists, and new signage with the Stellantis name will eventually be placed at the plants in Kokomo and Tipton, according to Jodi Tinson, Stellantis’ communications director for manufacturing and labor.
Now, local union officials say they’re waiting to hear more details on how the merger will affect operations and the around 7,100 workers at the local factories.
Matt Jarvis, president of UAW Local 685, which represents the plants in Kokomo and Tipton, said there are no details right now since the merger just happened, but they don’t think it should affect local operations at this time.
“It’s kind of an unknown,” he said. “It’s speculation on how this might affect us.”
Stellantis CEO Carlos Tavares said Tuesday during a press conference that the tie-up of the two companies will help preserve jobs, as well as factories and the 14 storied brands now under its umbrella.
The new company is based financially in the Netherlands and has a global workforce of 400,000. But, Tavares said, jobs only accounted for 10% of manufacturing costs, and that he had “tons of other things” he can do to improve profitability.
The company said it plans to create synergies that save $6 billion per year, largely through reduced manufacturing, engineering and parts purchasing costs. But Tavares was confident that brands would be boosted, factories would be filled and no jobs would be lost – at least initially.
“Our commitment on this merger is that we will not shut down plants as a consequence of the merger,” Tavares said. “I think that there’s many more things to do in our car company than just cutting costs.”
He said the current brands “represent a strong asset to the company,” but in some cases, there was work to do on clarifying the brand identity.
Tavares also said manufacturing synergies of the combined companies would be achieved through a system of “sister cars,” or unique models that share some combination of platforms and components.
He claimed that fears for job losses, including in Italy, where factories were under-utilized even before the pandemic, were unfounded.
“This merger is acting as a shield to protect the activity on the plants, rather than representing a risk for the people who may be anxious about the creation of this new entity,” he said.
But Tavares also said that vehicles have to be competitive on price and quality, and if expenses get too high, profit margins will fall and other steps may have to be taken to reduce costs.
“There are moments where you can’t avoid it,” he said.
Tavares announced that Stellantis would launch 10 new models with electrified powertrains — including full battery-powered vehicles as well as gas-electric hybrids — in 2021, adding to the 29 already available. He said all new models introduced through 2025 would have an electrified powertrain, and a strategy plan is upcoming.
UAW 685 President Jarvis said he’s hopeful the move towards electrification could be a boost to the local plants. The new GMET4 engine that will be built at the Kokomo Engine Plant is set to play a pivotal role in expanding electric engine options, since a significant number of new technologies can be applied to it.
“I think it’s going to help advance us forward in the electrification of our vehicles, because Peugeot is more advanced in that process,” Jarvis said. “By sharing those platforms with us, I think it will help us jump ahead and catch up with other companies that are ahead of us.”
He said he was also hopeful that the company would incorporate transmissions and other products made in Kokomo into other brands that are now under the Stellantis umbrella.
“Hopefully, they’ll want to share in some of the products we make here in Kokomo, and can merge them into the Peugeot vehicles or other vehicles they manufacture oversees,” Jarvis said. “Hopefully we can gain some of that work from this merger.”
But some worry the merger could lead to the demise of some of FCA’s heritage brands like Chrysler and Dodge. Jeep and Ram have been profitable powerhouses, but sales of Chrysler and Dodge vehicles hit a huge slump last year.
Chrysler sold just over 110,000 vehicles in the U.S., its biggest market, in 2020, according to motortrend.com. The brand now only consists of the Chrysler Pacifica minivan and the Chrysler 300 full-size sedan.
Dodge sold around 267,000 vehicles in the U.S. last year, but the brand has been reduced to the Durango SUV, and the Charger and Challenger muscle cars, according to motortrend.com.
Jarvis said he hopes the brands don’t eventually land on the chopping block under Stellantis – especially Chrysler, since the company has been the backbone of Kokomo’s economy for so long.
The Associated Press contributed to this story.