2024-02-11 01:52:26
A few short remarks by the CEO of Stellantis, Carlos Tavares, became another bone of contention between the company, the Italian government and the local unions. What is the real situation and can the conglomerate really expand its already rich portfolio further?
In an interview with Bloomberg, Carlos Tavares again picked up his favorite refrain about Darwinism and the idea that the stronger swallows the weaker. “As long as the numbers are at the required level, you can easily come to the conclusion that I am ready for any kind of consolidation,” he said, quoted by BTA.
It doesn’t take much to create an excitement ready to spread like wildfire, writes the French specialized edition “Karadiziak”. Tavares’ words sparked speculation in stock market circles, among trade journalists and analysts, that the constellation of 14 brands could grow further by acquiring another car company.
Somehow quite naturally, the eyes turned to “Renault”, since the hypothesis in this case is also based on real facts. Tavares’ statement came two days after the French company’s CEO, Luca de Meo, pulled out of the initial public offering of electric car division Ampere. Moreover, if the financial resources of the two companies are compared, the assets of “Renault” are twice less than those of “Stelantis”.
However, according to the French publication, one should not put the cart before the horse or, more precisely, the body before the engine, since such an operation, which will lead to a dominant position in the French car market, and not only, seems unlikely.
However, the French government, which is a shareholder in both Stellantis and Renault, would bet on an alliance between the two companies to consolidate the national industry amid increasingly fierce competition from German and especially Chinese rivals. . The possible merger would block or make the acquisition of a stake in “Stelantis” by the Italian state enormously expensive, some financial sources told “Messagero”.
As reported by Corriere della Sera, Carlos Tavares himself emphasized the need to consolidate the European car market in his interview with Bloomberg, although without mentioning the word merger. “If the car industry doesn’t move, it will disappear under the pressure of the Chinese: I’m just trying to figure out how to make my company successful.” He pointed to the factories in Mirafiori and Pomigliano as most at risk of job cuts due to “the fact that the Italian government does not subsidize the purchase of electric cars”.
His speech further inflamed the simmering conflict with Rome and, as one might expect, the reaction of the Italian unions was not long in coming.
“It is serious and worrying that Tavares indicated that the prospects for Pomigliano are uncertain. Withdrawal from Campania and from southern Italy would have serious consequences for the region. We want greater commitment from the government on this issue. “Stellantis” must respect the agreements, exercise social responsibility and to guarantee the protection of all factories in the country”. This was stated in an interview with “Matino” by Luigi Sbarra, General Secretary of the Italian Confederation of Workers’ Unions (CISL). “It’s not about starting conflicts or going to war with a multinational company, but the tone that Tavares has been using lately is not to our liking. It borders on blackmail. The government is doing the right thing by demanding that Stellantis come clean about its industrial projects in the country. What is needed is a pact between the company and the unions to restart the car sector in Italy”. he added.
The outlook for Italian plants would become even more uncertain if French merger ambitions materialize. For now, it’s just a hypothesis. At present, the main shareholder in “Stelantis” is “Exor”, the holding owned by the Agnelli family with a share of 14.2 percent, followed by “Peugeot” with 7.1 percent. However, both companies benefited from a provision in the articles of association, according to which holders of shares for at least three years have the right to increase their voting rights – 23.13 percent and 11.1 percent, respectively.
So did the French investment bank (Bpifrance), which operates on behalf of the government in Paris and already has a quota of 9.9 percent.
The president of “Stellantis” (Stellantis) John Elkann has officially denied, quoted by the French press, any project to merge the French-Italian-American consortium with another car manufacturer, rejecting the speculation about a merger with “Renault” (Renault). He emphasized that the automaker “is concentrating on the implementation of its strategic plan” and “on the timely implementation of its already announced projects in order to strengthen its positions in all the markets in which it is present, including Italy”. For its part, “Renault” did not responded to AFP’s request for comment.
The government of Giorgia Meloni and Stellantis have recently been at odds with each other through the media. The carmaker has criticized the executive for turning its back on electric cars, while Meloni has accused Stellantis of maintaining a privileged relationship with France after the PeSA merger ( PSA) with Fiat-Chrysler.
Against the background of mutual attacks between Stellantis and the Italian authorities, the age-old struggle for supremacy between Rome and Paris, which is not limited to the automotive sector, the increasingly strong Chinese competition, the challenge of the transition to electric cars and the veiled remarks of Tavares, aiming to test market sentiment, any outcome from here on out would not be surprising.
One thing is certain – Brussels would hardly be enamored of a car company acquiring a dominant, almost monopoly position in the European market.