FCA Rescinds Their Merger Offer With Renault

Moved the discussion to here since @William Maley beat me to the story. 

Wow.  What happens now?  Will Nissan simply acquire/merge with FCA to resolve this?  Or will Nissan simply allow an automotive recession to do the dirty work for them?

Nissan is in no position to be acquiring anyone. They're in a worse position than FCA. FCA actually makes some profit. 

A recession or a 25% tariff on Mexican imports could run FCA deep into the red, and I wonder how much cash they have on hand to survive a down turn of a couple years.

Actually I'll answer my own question.  FCA has 23 million euros cash on hand in 2014 and ended last year with 12 billion euros cash on hand.

5 minutes ago, smk4565 said:

A recession or a 25% tariff on Mexican imports could run FCA deep into the red, and I wonder how much cash they have on hand to survive a down turn of a couple years.

It'll hit everyone though, not just FCA.  And they'll all have to raise prices.

NPR was doing a story today about how all of the wiring harnesses for cars are built in Mexico... it doesn't matter what brand. 

11 minutes ago, Drew Dowdell said:

Nissan is in no position to be acquiring anyone. They're in a worse position than FCA. FCA actually makes some profit. 

Some is the key word, on 110 billion euro in revenue, they had 3.6 billion in profit.  That is barely more than a 3% margin, which isn't a lot of room for error and the past few years were banner years for the auto industry.  And that is all while these guys haven't spend a dime on new product for Dodge/Chrysler or electric cars or autonomous cars.

39 minutes ago, Drew Dowdell said:

It'll hit everyone though, not just FCA.  And they'll all have to raise prices.

NPR was doing a story today about how all of the wiring harnesses for cars are built in Mexico... it doesn't matter what brand. 

It hurts them all for sure,  some just have higher margins or more cash on hand that can weather a storm. 

12 hours ago, smk4565 said:

Some is the key word, on 110 billion euro in revenue, they had 3.6 billion in profit.  That is barely more than a 3% margin, which isn't a lot of room for error and the past few years were banner years for the auto industry.  And that is all while these guys haven't spend a dime on new product for Dodge/Chrysler or electric cars or autonomous cars.

11 hours ago, smk4565 said:

It hurts them all for sure,  some just have higher margins or more cash on hand that can weather a storm. 

Margins are slim for everyone in the industry.  $3.6b in profit is doing okay. 

Found something that explains why the merger is off.  Paris is to blame:

http://www.thedetroitbureau.com/2019/06/french-government-blamed-for-collapse-of-fiat-chrysler-renault-merger-plan/