Fiat Chrysler Automobiles (FCA) and Peugeot Citroën (PSA Group) have agreed to merge, however several technical issues could derail the 50/50 partnership. The proposed deal would put PSA Group CEO Carlos Tavares in charge of the joint company. A former Renault-Nissan executive, Tavares joined PSA in 2014 and masterminded the company’s 2017 purchase of General Motors’ Germany-based Opel division.

The resulting company would be the world’s fourth largest automaker. PSA’s strong Asian and European divisions would join FCA’s strengths in North America.

“This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity,” Tavares says.

Ownership will be a tough issue to work out, however. The Agnelli family, descendants of Fiat’s founders, own the larger block of FCA stock, controlling about 29% of shares. PSA, on the other hand, is a socialist-capitalist hybrid with 20% of shares held by various French national banks and agencies, 12% owned by China’s Dongfeng Motor (its largest partner in Asia), and 12% owned by the Peugeot family. Founded by Mao Zedong, Dongfeng’s ownership by China’s government would be an especially difficult issue for U.S. securities regulators.

PSA would distribute its shares in supplier Faurecia to its shareholders, divesting itself of that business. FCA would take similar steps to distribute its robotics subsidiary Comau to its shareholders.

Neither FCA nor PSA shared details on when they hope to finalize a merger. https://www.fcagroup.com; https://www.groupe-psa.com

Several automakers join Trump administration push to cancel California rule-making ability

While Ford, BMW, and Honda are partnering with California’s Air Resources Board on fuel economy regulations that are more stringent than federal standards, General Motors, Fiat Chrysler Automobiles (FCA), and Toyota have joined the Trump Administration in opposing such rules.

The Trump Administration is working to reset Obama-era fuel economy rules that call for 54.5mpg fleet averages by 2025, a standard that California still wants automakers to meet. The Golden State can set its own rules (and 13 other states follow those) thanks to a waiver to federal rules issued by the U.S. Environmental Protection Agency. While the Trump Administration has not yet set exact new standards, its rule-making plans call for cancelling California’s waiver.

This summer, Ford, BMW, and Honda agreed to voluntary limits with California, a decision that led President Donald Trump to direct the Justice Department to investigate the automakers for possible anti-trust violations for the collaboration. California has sued to block cancellation of its EPA waiver, and a new automaker coalition recently sided with the Trump Administration, urging for the waiver’s ending.

The Coalition for Sustainable Automotive Regulation, representing GM, Toyota, FCA, and possibly others, filed court briefs urging a single national standard instead of one set of rules for California and its allies and a different set for other states.

“The decision to intervene in the lawsuit is about how the standard should be applied, not what the standard should be,” says John Bozzella, president and CEO of Global Automakers and Coalition spokesperson. “By participating we ensure the concerns of consumers, autoworkers, retailers, and manufacturers are heard in this dispute.”

The case, Environmental Defense Fund v. Chao, was filed in the U.S. Court of Appeals for the District of Columbia Circuit. https://www.fcagroup.com; https://www.gm.com; https://www.toyota.com