The Politics of Cars

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The Politics of Cars

Fiat-Chrysler and Renault are considering a massive 35bn Dollar merger, to create the third largest car manufacturer in the world. The only two larger automakers would be VW, makes sense, they own everything, and Toyota, also makes sense, ISIS needed a ton of trucks. 

 

The proposition has caused Chrysler and Renault stocks to soar up by 11% and 15%, respectively. The Chrysler rise seems logical enough, merging with a company that occasionally makes passable cars would be a considerable step up for the marque. It is difficult to see what there is to gain from Renault’s side, as no one in Europe is dying to see a car that can only go straight with a cup holder large enough for a bucket of Sprite. 

 

But, the merger is not clear cut, as it comes at a time of political cat fighting between France and Italy. Ever since Italy’s Five Star movement and the Northern League came into power, Italy and France have opposed one another on immigration, the war in Libya, the EU and government debt. As a result, the Italians have been taunting Macron, by supporting the two things he fears most: the yellow vests and Marine Le Pen.

 

Because the French own part of Renault and the Italians have a stake in Fiat, both governments are now getting involved. Salvini is demanding Italy gets a piece of the action should the merger go forward and Macron has to approve the deal before it can go forth, as he knows what unemployment could do to the Arc de Triomphe:

Arc De Triomphe

Under normal circumstances this wouldn’t be too big a problem and La France and Italia would just talk it out. Far from normal times, the two governments find themselves in the unfortunate place of avoiding each other more than they avoid wars. Having said that, history teaches that when negotiations get tough, Italians quickly join the other side of the alps and the French have no problem surrendering their position. 

 

Car companies are points of national pride, even in the US for some reason, and with such bad blood between the French and Italian regimes right now geopolitics could spoil the party.

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