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Friday 39 Business Friday, November 22, 2019 GM lawsuit won’t torpedo Fiat Chrysler merger with Peugeot Fiat Chrysler to recall nearly 700,000 SUVs for electrical fault risk MILAN: Fiat Chrysler’s (FCA) planned $50 billion ished by this filing, both its content and its timing. We merger with Peugeot owner PSA Group will not be can only assume it was intended to disrupt our pro- blown off course by a shock lawsuit against FCA posed merger with PSA.” In September 2015, FCA’s from General Motors, a source close to FCA said former Chief Executive Sergio Marchionne urged GM yesterday. The source, speaking on condition of counterpart Mary Barra to consider a tie-up of the anonymity, also said the lawsuit seeking “substantial two carmakers. GM rebuffed FCA’s advances. damages” would not lead FCA and PSA to review GM on Wednesday alleged that, after it rejected the two companies’ valuations in their proposed deal a merger bid from FCA, Marchionne conspired to to create the world’s fourth-biggest automaker. Gen- negotiate a new four-year contract with the UAW eral Motors (GM) filed the lawsuit in the United “designed, through the power of pattern bargaining, States on Wednesday, al- to cost GM billions.” FCA leging FCA had bribed will vigorously defend itself United Auto Workers against this “meritless” (UAW) union officials over lawsuit, said in the letter to years to corrupt the bar- FCA, staff, seen by Reuters. “We gaining process and gain Peugeot in will not be slowed down by advantages, costing GM this act,” he said, adding: billions of dollars. merger talks “Let’s keep the perform- “Talks are progressing ance up as it has clearly got ITALY: In this file photo the logos of automobile companies (left to right) Abarth, Lancia, Fiat, Alfa Romeo smoothly,” an FCA some of our competitors and Jeep are pictured at the entrance to the Fiat Chrysler Automobiles (FCA) at the Fiat Mirafiori car plant spokesman said yesterday. worried.” Manley was not in Turin, Italy. —AFP PSA declined to comment on the GM lawsuit and its named in the GM complaint and the source close to potential impact on the merger talks. Shares in FCA FCA said he was not linked to the case. year Dodge Durango and Jeep Grand Cherokee issues with their fuel pump relays. The company, were down 2.7% at 0920 GMT, while PSA stock was SUVs, will address silicon deposits on the contact which last month announced it planned to merge with 0.6% lower. FCA and PSA announced plans last Fiat Chrysler to recall points of fuel pump relays that may interrupt electri- Peugeot owner PSA, said it would notify owners at a month to combine forces to better tackle the cost of Meanwhile, Fiat Chrysler Automobiles NV said cal current, Fiat Chrysler said in a statement. It said later date when they will be able to schedule repairs new technologies such as electric and self-driving yesterday it will recall nearly 700,000 sport utility it is unaware of any injuries or accidents related to at dealerships. The recall includes around 528,500 vehicles as well as a downturn in auto markets. vehicles worldwide because a faulty electrical con- the faulty vehicles. vehicles in the United States, 34,700 in Canada, In a letter to employees about the GM lawsuit, FCA nection could prevent engine starts or contribute to The Italian-American automaker had previously 18,100 in Mexico and 116,500 outside North Amer- Chief Executive Mike Manley said: “We are aston- a stall. The recall, covering 2011 through 2013 model recalled most of the same SUVs in 2014 and 2015 for ica, it said. —Reuters timated future lending risks and overvalued Moody’s sees assets like property, presenting dangers in case of an economic downturn, she said. Last year, loans to the private sector in- elements from Australia and Morocco, BMW ‘negative’ creased more than five percent - the BMW ups said. By 2023, the group plans to offer 25 fastest pace in 15 years - at a time when “electrified” models including hybrids and full outlook for “the economic outlook was better than at orders of battery-electric vehicles. The first all-electric present,” the Bundesbank noted. Mini compact cars are to roll off its Oxford, “Major systemic banks” were the UK line later this year. German banks biggest contributors, as weakened titans battery cells And it expects to double electric sales by 2021, followed by a “steep growth curve” of 30 FRANKFURT AM MAIN: Ratings agency like Deutsche Bank and Commerzbank look to win market share from smaller savings for electric cars percent annual expansion until 2025. Lithium- Moody’s yesterday slashed its outlook for ion cells are the building blocks of the massive German banks from “stable” to “nega- banks and cooperatives that dominate the batteries built into electric and hybrid vehicles. tive”, warning their profitability and cred- domestic environment. Moody’s noted that FRANKFURT AM MAIN: German high- But few carmakers have taken the huge finan- itworthiness would “decline” in the German banks “have had very limited suc- end carmaker BMW said yesterday it was cial risk of building up in-house production, as coming months. “Banks’ weak profitabil- cess in improving their high cost-to-in- massively increasing orders of battery cells volumes remain low compared with combus- ity will decline further as net interest in- come ratios”, spending around 80 euro for electric cars for the coming decade, as come falls” amid low or negative interest cents for each euro of revenue in 2018. it plans dozens of new electrified models. tion engines and the technology is swiftly de- rates set by the European Central Bank, Meanwhile risk-averse depositors prefer The total increase of 6.2 billion euros ($6.9 veloping. Rather, they prefer to farm out the Moody’s vice-president Bernhard Held to heap up cash in savings accounts rather billion) will come from a new 2.9-billion- battery work to specialist suppliers. said in a statement. than opt for riskier investments like stocks euro contract with Samsung-SDI and an in- About two thirds of cell-making capacity While banks must for now set aside little - building deposits up to 40 percent of the crease from 4.0 to 7.3 billion in orders from is in China, with giant CATL alone account- cash to cover the risk of borrowers falling sector’s assets. China’s CATL, BMW said in a statement. ing for one quarter of global supply. Japan’s behind on payments, such charges are “un- As banks cannot always find ways - German carmakers have been squeezed by Panasonic, China’s BYD and Korea’s LG- sustainably low”, he judged. Especially such as lending - to put that cash to work years of emissions scandals and imminent Chem and Samsung-SDI round out the top smaller banks that rely on customers’ de- in the real economy, they deposit large tougher greenhouse gas rules in Europe five manufacturers. Some of the companies posits for their funding are seeing profits amounts with the ECB, which presently in- into making big bets on electric mobility. are expanding into Europe, with CATL sapped by low rates, which have prompted flicts a negative interest rate of -0.5 per- Yesterday’s announcement “secures long- building a factory in Erfurt that will initially many bosses to blast the ECB for the policy. cent. Banks have even been attempting to term battery cell needs” for the company, supply BMW. But Paris and Berlin hope Also yesterday, Bundesbank (central fend off new clients from opening ac- BMW said, adding that it was itself organizing government backing can help found an “Air- bank) vice-president Claudia Buch warned counts, passing on the negative rates to supplies of raw materials cobalt and lithium to bus of batteries” to take on Asian competi- German lenders’ “vulnerability has gradu- savers. One Bavarian cooperative bank re- the cell makers. “Compliance with environ- tors, with planned investments of between cently became the first to charge a nega- ally grown” to credit risks, as she pre- mental standards and respect for human rights five and six billion euros - four billion to tive rate from the first euro deposited in a sented the institution’s annual financial have the highest priority” in sourcing the vital come from the private sector. —AFP stability report. Banks could have underes- savings account. —AFP.