FCA loses money, but less than expected
Like almost all car manufacturers, Fiat Chrysler Automobiles has lost money in the second quarter of the year. But the loss is less than expected, a proof for FCA’s managers to re-insist on the soon-to-realize fusion with PSA.
The latter is also suffering from the corona crisis but nevertheless managed to stay ‘in the green’, despite the fact that sales went down considerably. Its future partner, FCA, has managed to keep the losses for the second quarter relatively confined to €1,04 billion. That’s half less than estimated, despite a sales decrease of 56%.
In May, FCA’s CFO, Richard Palmer, foresaw a very bad second quarter: after the loss of €1,7 billion in the first quarter, he thought the second would be worse at more than €2 billion of losses.
“Our second quarter has shown that decisive actions and the motivation of all personnel have contained the effects of the corona crisis,” commented FCA CEO Mike Manley. “Our factories are operational again, our sales outlets have restarted well, we have the flexibility and the financial strength to realize our plans.”
A fusion as soon as possible
The Covid-19 crisis has once more showed that the fusion between FCA and PSA is a very logical solution. The work of both teams preparing the merger is continuing; the objective is to have everything fixed at the end of the first quarter of 2021.”
“Twelve of the 22 authorities involved have already agreed with the fusion. The investigation by the European Union shouldn’t endanger the planning we have in mind to conclude the deal.” The fusion, giving birth to the group Stellantis, creates the fourth biggest car manufacturer in volume, and the third biggest when turnover is taken into account.
In France, some are criticizing the 50/50 equation of the merger, indicating that the financial and industrial situation of PSA is far more promising than those of FCA. Still, officially these critics are ignored by the top managers in both companies, even though FCA had to lend €6,3 billion with a guaranteed loan of the Italian state.