BELVIDERE (WREX) – Fiat Chrysler, the owners of the Belvidere assembly plant, has submitted a proposal to merge with French automobile manufacturer Groupe Renault.
The announcement of the proposal was made by Fiat Chrysler in a press release Monday morning.
The proposal is for a 50-50 merger between the two major automotive manufacturers.
According to FCA, the combination would create the third largest carmaker in the world, with 8.7 million vehicle sales, behind only Volkswagen and Toyota. General Motors would fall to fourth, according to CNN.
The proposal also says there would be no plant closures as a result of the combination.
This past February, FCA Chrysler announced that 1,371 workers would be laid off at the Belvidere facility on May 6. Then, on the day those layoffs went into effect, FCA announced an additional 32 people would be laid off.
Fiat Chrysler said in a statement that the additional layoffs were needed “to properly align with the plant’s return to a two-shift operating pattern.”
Shares in Fiat Chrysler and Renault jumped 13% and 11.5% respectively after the announcement of the merger proposal, according to CNBC.
With a 50-50 merger proposal, it is not yet clear who would run the new company if the merger is approved. According to an article from CNN, Renault said it will “study with interest” the proposal made by FCA.
Renault does not have a major presence in North America, rather sells most of its vehicles in Europe, Russia, Africa and the Middle East. FCA says a merger would make the new company #4 in sales in North America, #2 in Europe, the Middle East and Africa, and #1 in Latin America.
There is no timetable listed for the agreement between the two companies.