Stellantis, the new company being created to combine Fiat Chrysler Automobiles with France’s Groupe PSA beginning next year, will start business with $6 billion a year in expected gains from synergies, says the merger’s chief architect, PSA CEO Carlos Tavares.
That is an increase from the approximately $4.5 billion in new synergies that were forecast when the two companies announced their marriage in December 2019.
The improved outlook, Tavares said in a newly published interview with Automotive News sibling publication Automotive News Europe, is the result of “listening to the proposals of the 25 cross-company teams we created to prepare for the merger, within a strict legal frame.”
Tavares said the two automakers have had 600 people working to smoothly merge FCA and PSA since the deal was signed a year ago.
He said uniting the companies will result in “roughly $20 [billion] to $25 billion of value creation.”
Tavares, currently CEO of PSA, will be CEO of the new company. He previously was known to American audiences in his role as chairman of Nissan North America.
He said the FCA-PSA union, which is expected to close in first quarter 2021, will bolster the company’s competitiveness in both North America, where FCA is a leading automaker, and in Europe, which is PSA’s main theater of operations.
“The fact that we are bringing the two companies together may also be an opportunity to be challenged on the things that we could even do better, and this is true for the Americas as much as for Europe,” Tavares said in the interview.
He said the merger also will help PSA’s efforts to reintroduce its long-absent Peugeot brand in the U.S. market. That plan will go ahead, even as the newly created Stellantis focuses on strengthening FCA’s position in the U.S.
“Whatever we decide in the Stellantis world, all of those ideas will improve the way we go to market and the way we run the business. I was working in the United States for a while [as head of Nissan North America], and I know how competitive the market is, and I am very humbled vis-à-vis the level of competitiveness it takes to grow a profitable presence there,” Tavares said.
“This is exactly what FCA has been doing, so my hat is off to the FCA team for that.”
