Autoextremist: Batting 1000
Here PDL AE rant of the week www.autoextremist.com
Detroit. After celebrating the 20th Anniversary of Autoextremist.com three weeks ago, this week marks another milestone for this publication – our 1000th issue. That’s quite a number and quite an achievement by any stretch of the imagination, and needless to say, we’re very proud to still be bringing AE to you every week.
As I’ve said repeatedly, this business is a swirling maelstrom, a kaleidoscope of the good, the bad and the ugly punctuated by fleeting moments of brilliance by the True Believers of all stripes. And this week is no different.
First of all, how crazy is the FCA saga getting? When the merger between FCA and Renault – you know, the one that everyone was so certain of – blew up after FCA Chairman John Elkann walked away from the deal, the hand-wringing was only just beginning. There are so many more dimensions to the story that it’s dizzying. There’s Renault, but then there’s the French government too. Those two players alone are enough to give any notion of a merger a stiff headache. And then there’s Nissan, whose nose seems to be permanently out of joint because, in the parlance of Rodney Dangerfield, they just can’t get no respect.
Now there are rumors of the talks being revived, with Nissan wanting a much larger cut of the action. One thing that hasn’t changed in all of this is that the clock is ticking on FCA. Beyond Jeep, Ram Trucks and its muscle/police cars the company is clearly not positioned for the future because it is woefully lacking in advanced technology. And the whole idea of merging with another automotive partner is designed to fix that.
Make no mistake, I believe a deal will be made, simply because FCA has no other choices – or interested partners – and time is running out. Any merger with any company will be fraught with problems and unforeseen challenges, and the sooner FCA can get a deal and set about figuring things out with its new partners, the better off it will be. That’s not to say things will go swimmingly well, because they rarely do with heavyweight corporate egos in play. But at this point FCA has no choice; the company must make a deal for its long-term survival.
But as if that weren’t enough, in the midst of all of this angst one of FCA’s top executives has thrown a giant wrench into the works. U.S. sales chief Reid Bigland filed a whistleblower lawsuit against FCA on June 5, suggesting that other top FCA executives were trying to make Bigland the scapegoat for its fraudulent sales reporting practices that embarrassed the automaker – and Sergio Marchionne – two years ago. FCA has withheld 90 percent of Bigland’s pay, according to the lawsuit, and deferred his 2018 annual bonus and stock share dispersal indefinitely in retaliation for cooperating with a U.S. Securities and Exchange investigation into FCA’s sales reporting shenanigans. That this dovetails with the usual chaos – which is standard operating procedure – out in Auburn Hills can’t be disputed, but even this is cause for alarm to the outside investor community. And one more reason that FCA needs a deal, even if it’s just to keep the Bigland lawsuit off of the news cycle for a while longer.