CNH+Fiat Industrial: 1+1= 2 at best

Finally, Sergio Marchionne has pulled the trigger on fully merging CNH and Fiat Industrial, and pretty much in line with expectations. The proposal made to the BOD at CNH (which Marchionne is Chairman of) from FI (which Marchionne is chairman of) is for a merger of the two companies at “undisturbed” pricing” answer the only real question for investors: Is there any downside for CNH shareholders?  It turns out not really.

The inverse question was more important: Is there any upside?  Not really here either, and that may be a disappointment for some investors who speculated

Euro car plants in the cross-hairs

Reports today of GM taking a 7% stake in PSA aren’t bad news in the long-term. GM has a great reputation for petrol engine development, and needs to focus its products in Eur. PSA has great product and top class diesel, but lacks scale. But the real sticking point remains: Too much capacity in Europe! Any credible PSA/GM plan would need:

• Aulnay — already fully expected that PSA will announce the closure post April election in France.Rumors of this closing have drawn virulent protest for the past year or more.  If not, I am suspect on PSA “recovery”
• Ellesmere Port (UK), the UK government has drawn a line in the sand to keep GM’s two plants open.  British politicians and labor successfully lobbied to stay open during GM’s tumultuous 2009 restructuring of Opel, and are already mobilizing.
• Bochum (North Rhine-Westphalia, Germany): This one is not so easy. The German auto market has been strong, and the German public has been pushed far in recent months with labor gearing up again to pressure politicians in the