It’s hard to give any credibility to this new rumor which has shaken up the automobile industry. However, it is necessary to talk about it to silence it. This is what motivated us to make it the editorial of the Watt Else newsletter of February 8.
Nowadays, the slightest rumor can take on international proportions in a few hours, even the most absurd ones. This is exactly what has been happening since February 5 with the delusional idea of a merger between Stellantis and Renault. The information disseminated by the Italian media Il Messaggero has come a long way. She went so far as to influence stock prices, pushing Stellantis management to publicly deny the information, a sign of the turmoil she created.
A merger of this type would be a tsunami for France, even more so than that of PSA (Peugeot, Citroën, DS, Opel) and FCA (Fiat Chrysler and all the brands of the Italian-American group) to become Stellantis in 2021. However, the media hype is essentially based on an article in which the formula “1 + 1 = 18” falls from the sky, based on a strange understanding of the interview given to Bloomberg by Carlos Tavares (boss of Stellantis).
A strange new flirting method?
Creating a merger of two industrial groups is like a marriage. If there is no chemistry, it is a failure and it is even worse if the marriage is arranged by a third party. Unless Carlos Tavares is manipulating us all with a perfectly mastered diversion, systematically belittling his future partner does not seem like the wisest strategy. In fact, the two groups have rather rekindled hostilities than shown signs of rapprochement. Particularly on the recruitment side where all moves are once again permitted, putting an end to a long non-aggression pact.
Without wishing to denigrate Renault’s efforts to get back into the race, the French group does not have much to offer to satisfy Stellantis’ insatiable appetite. Carlos Tavares is interested in new export opportunities (outside the EU) and/or high profitability. Suffice to say that dominating the French market (unprofitable) should not be one of the objectives of the boss of Stellantis. To balance things out, Renault would not have much more to gain from uniting with the ogre Stellantis.
Job gravedigger
To imagine that the French government could support such a merger is equally improbable. Stellantis has not yet finished skimming its workforce since its last merger, which should already be done again, by dismantling the French factories and the Renault headquarters of a good part of its payroll. This is not ideal in a presidential assessment.
If we are to believe the mocking remarks of Carlos Tavares towards Luca de Meo, the Renault group could be vulnerable to a takeover by a Chinese group. This is certainly a scenario feared by Bercy, obsessed by its desire to block China. However, the decision should not be limited to choosing between plague or cholera. There is a priori no urgency to launch into an operation “we must save the Renault soldier”. Let’s give the management in place a little more room to restart the machine, it could surprise us.
The European institutions and their anti-trust policy could also put their two cents into the matter. On utility vehicles alone, the merger would create a monopolistic monster that is difficult to accept.
Never say never
Certainly, just a few months ago, it was difficult to imagine the boss of Stellantis entering into a partnership with a Chinese manufacturer, the sworn enemy according to the public comments of Carlos Tavares. Yet that’s what he did with Leapmotor. In this environment, as in politics, we must always be careful not to believe that things will never change or that public declarations are an intangible truth.
Before his retirement, Carlos Tavares wants to make one last “big move”. This is what the interview in Bloomberg, at the origin of this rumor concerning Renault, showed. Nevertheless, the thirst for conquest would target one of the American giants. But in view of the American market, this last big risky move would leave a real banana skin for his successor.
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