| 1 MINUTE READ

How Will GM Lawsuit Impact FCA-PSA Merger?

The racketeering lawsuit General Motors filed this week against Fiat Chrysler Automobiles could rattle the merger FCA hopes to complete with PSA Group by year-end.
#Chrysler #europe #Fiat

Share

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

The racketeering lawsuit General Motors filed this week against Fiat Chrysler Automobiles could rattle the merger FCA hopes to complete with PSA Group by year-end.

GM claims that FCA conspired with the United Auto Workers union, paying UAW leaders bribes for years in exchange for lower labor costs and cheaper production rules. If GM is correct, analysts say, the company could seek damages anywhere between $6 billion and $15 billion.

Analysts point out that if a hefty liability does result, PSA could use it to alter terms of the merger.

Other experts wonder whether GM filed the lawsuit to torpedo the merger entirely, perhaps by drawing the attention of the Trump administration. GM insists the two are unrelated.

But economic advisor Larry Kudlow already has signaled possible interest. He notes that China’s Dongfeng Motor Group is a major investor in PSA and would therefore become an influence in the merged companies.

Kudlow emphasizes that the White House is adamant about blocking Chinese business gains made at the expense of the American economy.

 

Related Topics

RELATED CONTENT

  • UAW Members Hike Pay for Senior Leadership by 31%

    Delegates to the United Auto Workers union’s annual convention in Detroit have overwhelmingly approved a 31% raise for their salaried international leaders.

  • Designing the 2019 Ram 1500

    Ram Truck chief exterior designer Joe Dehner talks about how they’ve developed the all-new pickup. “We’ve been building trucks for over 100 years,” he says. “Best I could come up with is that this is our 15th-generation truck.”  

  • Nio Plant Venture Lands $1.5 Billion Investment

    Chinese electric-car startup Nio Inc. is forming a manufacturing joint venture with Beijing E-Town International Investment and Development Co., which is investing 10 billion yuan ($1.5 billion) in the business.