FCA-PSA merger, European plants at risk – Mondo Auto

Among the first statements after the formalization of the merger between FCA and PSA, there was one that reassured trade unions and workers, regarding possible consequences for the factories of the two groups. Carlos Tavares and John Elkann were clear, no factory will be closed.

Fiat Punto, the rebirth thanks to the FCA-PSA merger

Second LMC Automotive however the scenario could be different, with FCA and PSA forced to make inevitable decisions due to the conditions the market is in: with the current structure, the nascent reality would have a production capacity of over 14 million vehicles, too many at a time of stagnation, even more so in Europe where the sale of city cars and small cars is strongly slowed down. By continuing to produce at the current pace, you would find yourself with 6 million surplus vehicles around the world. To make the expenses of this over-production would be just the European factories, in particular the Fiat plant of Kragujevac in Serbia and the Vauxhall plants of PSA in Ellesmere Port and Luton in Great Britain.

FCA and PSA have suffered reassured unions and workers but the stringent regulations on emissions and the deadlines set for 2021 and 2025 could put the new group at a crossroads, with brands forced to adopt increasingly efficient engines. At risk in fact, in addition to the factories already mentioned, there would also be production facilities specialized in FCA engines, present in Italy and Poland. According to LMC in fact, under the magnifying glass there would be Termoli and Pratola Serra, which produce engines for Lancia, Alfa Romeo and Fiat, in addition to that of Bielsko-Biala in Poland: one of them could be too many in the future.

The announced transition of Fiat towards the segment B for example, it derives precisely from the high costs that the adaptation of segment A models to the new emission standards entails. The merger with PSA could lead to a synergy in Europe in this sense, with the sharing of technologies and the elimination of some models that are too expensive, as happened with Opel who abandoned Adam and Karl.