1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

Secondly, success in the automotive industry is connected with systematic and permanent research and development, delivering permanent improvement of automobiles. Thirdly, success in the automotive industry needs a strong brand, which is often connected with national pride. Fourthly, the automotive industry is vulnerable to fluctuations in economic cycles. Lastly, as it can be implied from the above, significant government (public) aid and support is needed for the existence of big automakers. Family ownership is typical in the automotive industry, maybe much more than in any other sector – FCA is owned by Agnelli-Elkann family, VW by Porsche-Piëch family and BMW by Quandt family. The direct influence of governments is common too – the French state in PSA and Renault and German Lower Saxony in VW. Participation of employees is normal as well, even obligatory in Germany (and in the Czech Republic now), i.e. for VW, Daimler and BMW, and voluntarily and possible in other jurisdictions (Borkovec, 2013, p. 108-109). The other aspect of automotive companies is the relatively common use of multiple voting shares, so called “Loi Florange” in France, or a similar instrument (Ventoruzzo, 2015). In the German jurisdiction, a special law was enacted, the so-called VW-Gesetz, mainly to secure state representation in the supervisory board of Volkswagen AG (Borkovec, 2014b). 5. Conclusion The proposed combination of FCA and PSA would be another big step towards stronger globalisation in the automotive industry resulting in the creation of the fourth biggest global automaker. The combination has to be seen as a logical response by the combining automakers FCA and PSA to geographical, technological and financial challenges. The cultural differences of corporate governance could be a latent threat (Borkovec, 2014a). Nevertheless, some cultural differences existed before, because FCA has its Italian branch (Fiat) and American branch (Chrysler), and PSA has a French branch (Peugeot/Citroen) and German branch (Opel). There are two systems of corporate governance around the world (Coffee, 2001, p. 3): (1) A Concentrated Ownership System , characterised by controlling blockholders and (2) A Dispersed Ownership System , without any dominant shareholder. Corporate governance in the automotive industry is generally complicated, including taking positions in elected bodies of automotive corporations, which is connected with many specific circumstances (checks and balances). Corporate governance of DutchCo will be given for the first years of its existence, and at least at beginning, the new combined company will have concentrated ownership with the codetermination of employees.

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