Howes: Rare cultural mash-up announced this week between Fiat Chrysler and Peugeot of France | Michigan Radio
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Howes: Rare cultural mash-up announced this week between Fiat Chrysler and Peugeot of France

Nov 2, 2019

Credit Daniel Howes / Detroit News

Maybe the new name for the merger of Fiat Chrysler and Peugeot of France should be United Nations Motors.

Rarely has the global auto world seen a cultural mash-up like the one announced this week.  Jeep SUVs meet Citroën cars.

Fiat Chrysler is an Italian-American automaker that is incorporated in the Netherlands. It’s headquartered in London and led by a Brit.

It makes all of its money in the United States and now is pursuing a merger with a French automaker that left the U.S. market almost 30 years ago.

Peugeot is headed by a guy from Portugal who burnished his turnaround cred by buying Germany’s Opel and Britain’s Vauxhall brands from General Motors. Under French management, the pride of Rüsselsheim accomplished in two years what it couldn’t do in the last 20 under American ownership: make a profit.

Forget pooling technology spending and rationalizing vehicle architectures. If this transnational merger is going to work, success will ride on the shoulders of its leaders. On their ability to navigate today’s auto industry and prepare for tomorrow’s. On their humility, their creativity, and their cultural patience in equal measure.

In a letter to employees, Fiat Chrysler CEO Mike Manley said “merging companies and cultures is something we know how to do well.” Yes, it sounds like corporate spin, but the proof is in the results.

It won’t be easy. Success in the transnational merger space hinges on how well cultures can be shaped around the hyper-competitive auto industry. The DaimlerChrysler “merger of equals” a generation ago proved to be no such thing.

Where the late Fiat Chrysler CEO Sergio Marchionne understood the industrial Midwest, its blue-collar values and the kind of people who make it work, the princes from Stuttgart got it all wrong. A succession of American Chrysler execs got nudged into retirement. Mercedes-Benz engineers refused to install their powertrains in Chrysler vehicles. And back in Germany, shareholders denounced American management and metal.

I know because I attended some of those interminable annual meetings in Stuttgart and Berlin. Chrysler’s lowly brands didn’t stand a chance.

With the same assets acquired out of bankruptcy, Fiat Chrysler Automobiles management proved the Germans all wrong. FCA is home to arguably the hottest brand in the automotive world – Jeep. And its Ram is the fastest growing truck brand in the rich U.S. market.

The CEO of the Franco-Italian-American company would be wise to heed the examples of ol’ Sergio, of Manley, even of his old boss, former Renault-Nissan CEO Carlos Ghosn.

If the merger process survives the due diligence process, scrutiny from regulators and meddling from the French government, management will have a brief window to set the right tone … and demonstrate that “cultural diversity” is more than a hollow corporate catch-phrase.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.