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Chrysler's future is in doubt

In this Wednesday, Feb. 26, 2020 file photo, CEO of PSA Groupe Carlos Tavares arrives for the presentation of the company's 2019 full year results in Rueil-Malmaison, west of Paris. Fiat Chrysler Shareholders of Fiat Chrysler and France's PSA Group are meeting Monday, Jan. 4, 2021 to vote on a merger that will create the world's fourth-largest automaker. The new company called Stellantis will be run by PSA CEO Carlos Tavares, who is known for cutting vehicles or ventures that don't make money.

MILAN — While running Nissan’s North American operations from 2009 to 2011, Carlos Tavares had a reputation for closely watching costs with little tolerance for vehicles or ventures that didn’t make money.

Experts say that means Tavares, the head of PSA Group, is likely to follow that blueprint when he becomes leader of a merged PSA and Fiat Chrysler Automobiles. The low-performing Chrysler brand might get the axe as could slow-selling cars, SUVs or trucks that lack potential.

Already the companies are talking about consolidating vehicle platforms — the underpinnings and powertrains — to save billions in engineering and manufacturing costs. That could mean job losses in Italy, Germany and Michigan as PSA Peugeot technology is integrated into North American and Italian vehicles.

“You can’t be cost efficient if you keep the entire scale of both companies,” said Karl Brauer, executive analyst for the iSeeCars.com auto website. “We’ve seen this show before, and we’re going to see it again where they economize these platforms across continents, across multiple markets.”

Shareholders of both companies are to meet Monday to vote on the merger to form the world’s fourth-largest automaker, to be called Stellantis. The deal received EU regulatory approval just before Christmas.

Tavares, who for years has wanted to sell PSA vehicles in the U.S., won’t take full control of the merged companies until the end of January at the earliest.

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