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Is merger talk demoralizing? — the debate

by David Zatz on

Automotive News’ lead FCA reporter, Larry Vellequette, today covered the demoralizing effect of constantly talking about a merger, which Allpar forum members had been discussing in parallel terms (of customer attitudes).

sergio marchionne

Many employees may be wary of merger talk, given the disastrous  Daimler takeover. Mr. Vellequette spoke “with scores of current and recently departed FCA employees” who believed that quoted merger savings of $10 billion per year would come out of current jobs.

He talked about people who stood by Chrysler during the grim times of Daimler and bankruptcy, working long overtime hours — nights and weekends, and finally seeing light at the end of the tunnel, to see FCA turn its capital to Alfa Romeo and overseas expansion.

The Automotive News article accuses FCA of keeping salaries lower (and expectations higher) than competitors, and claimed that many employees are demoralized by the merger talk, with some jumping ship.  (The full article is at Automotive News.)

Sergio Marchionne small 2011

FCA responded quickly, with the head of HR, Mike Keegan, writing about FCA US’s massive expansion, with 35,000 new or replaced jobs, higher sales and market share, profits for dealers, new products, and new markets which mean that engineering costs are spread over more and more cars.

Mr. Keegan wrote that the merger talk has much to do with Sergio Marchionne’s belief in openness, and is being discussed in the open out of respect to employees. In the past, Mr. Keegan noted, this would have been discussed in back rooms. He also clarified that the $10 billion in merger savings would come from capital spending efficiencies, rather than from workforce reductions — which Mr. Marchionne has said in the past (one example would be Alfa Romeo and Dodge sharing in the development of new cars, or standardizing on a single four-cylinder engine series).  Full article.

How do you feel? Would a merger help former Chrysler employees by helping it amortize costs and providing access to more technology, capital, and sales, or would it hurt Chrysler by killing jobs and exporting engineering and manufacturing? Let us know below or in the forums.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304


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