Renault delays decision on Fiat Chrysler marriage proposal

Renault has delayed a decision on whether to merge with Fiat Chrysler, a deal that could reshape the global auto industry as carmakers race to make electric and autonomous vehicles for the masses.

The deal still looks likely, but faced new criticism Tuesday from Renault's leading union and questions from its Japanese alliance partner Nissan.

The French government is also putting conditions on the deal.

The French carmaker's board will meet again at the end of the day Wednesday to "continue to study with interest" last week's merger proposal from Fiat Chrysler Automobiles, Renault said in a statement.

A Renault board meeting Tuesday to study the deal was inconclusive. The company didn't explain why.

France and Italy are both painting themselves as winners in the deal, which could save both companies 5 billion euros (USD 5.6 billion) a year.

But workers worry a merger could lead to job losses, and analysts warn it could bog down in the challenges of managing such a hulking company across multiple countries.

The big loser may end up being Japan's Nissan, whose once-mighty alliance with Renault and Mitsubishi is on the rocks since star CEO Carlos Ghosn's arrest in November.

Nissan CEO Hiroto Saikawa cast doubt Tuesday on whether his company will be involved in a Renault-Fiat Chrysler merger and suggested adding Fiat Chrysler to the looser Renault-Nissan-Mitsubishi alliance instead.

Saikawa said in a statement that the Renault-Fiat Chrysler deal would "significantly alter" the structure of Nissan's longtime partnership with Renault, and Nissan would analyse its contractual relationships to protect the company's interests.

If Renault's board says "yes" to Fiat Chrysler, that would open the way for a non-binding memorandum of understanding to start exclusive merger negotiations. The ensuing process including consultations with unions, the French government, antitrust authorities and other regulators would take about a year.

A merger would create the world's third-biggest automaker, worth almost USD 40 billion and producing some 8.7 million vehicles a year. That's more than General Motors makes, and trails only Volkswagen and Toyota.

If the merged company were to include the Nissan-Mitsubishi alliance too, they'd be the No. 1 car producer in the world.

But Nissan wasn't consulted on the potential deal, and had resisted Ghosn's idea of a full merger with Renault before his arrest. Ghosn denies accusations of financial wrongdoing.

The French government, which owns 15 per cent of Renault, has held talks with Renault and Fiat Chrysler in recent days, and a government official told The Associated Press that the "dynamic is positive" and the merger "makes sense."
Renault's CGT union slammed company management for not consulting union representatives on the talks and called the merger "fundamentally damaging to Renault, its engineering, its industrial strength and its workers."
Italian Deputy Premier Luigi Di Maio is closely following the potential merger, and said in a Facebook message Monday that it would bring "a significant added value to Italy" and he "sees our country as one of the protagonists."