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Proposed savings from Chrysler-Peugeot merger look unlikely and UK may bear brunt

Posted by Warwick Business School at 19 December 2019, 17:02 CET |
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Commenting on the merger between Fiat Chrysler and Peugeot, John Colley, Associate Dean of Warwick Business School and an expert on company mergers, said:

"What we do know is that jobs will be protected in France and Italy. This will be a fundamental requirement of both governments. Other countries such as the UK will have to bear any real efficiency savings.

"Mergers such as this normally work well on paper, but in practice the different management cultures will undoubtedly find it difficult to work together.

"Shared supply chains and technical development will also face the battle between both cultures and countries. Major cross Border mergers in Europe have frequently suffered a similar fate.  One only has to think of Lafarge and Holcim in the cement industry. The €4 billion of proposed savings in this merger looks unlikely indeed.

"The problem for both companies is technical development as the industry is faced with a move to electric and autonomous vehicles. Alliances are essential to be able to fund this development. Scale is becoming increasingly important in an industry which is requiring major investment to stay in the game."

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