Welcome to the Daily 5 report for Tuesday, May 27.
Beda Bolzenius once stood out as a successful automotive supply chain executive. But in 2019 he took on the task of being the German CEO presiding over the merger of two struggling global parts suppliers: Italy's Magneti Marelli, part of Fiat Chrysler Automobiles, and Japan's Calsonic Kansei, controlled by Nissan Motor Co. At the time, it looked like Bolzenius could pull off this unwieldy merger and Automotive News named him a 2019 All-Star.
Private equity pioneer KKR & Co. masterminded the deal, investing at least $11 billion into the creation of a $16.4 billion-a-year monster. The mission focused on capitalizing on global growth and creating synergies among far-flung operations rooted in Fiat and Nissan cultures.
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Fast-forward to today — following the COVID-19 pandemic, the microchip shortage, Bolzenius' departure and now U.S. tariff uncertainty — and KKR reportedly is prepared to sell Marelli to India's Motherson Group. We don't have official confirmation of the deal, but it's clear Marelli is suffering from heavy debt and needs temporary working capital. So it's a good bet KKR will lose on this deal.
Ultimately, Marelli could once again prove the longtime M&A philosophy that merging two large troubled companies will merely yield one large troubled company — especially in the auto industry.
In other news, the Volkswagen Group scandal over diesel emissions cheating, now in its second decade, generated four prison sentences in Germany on Monday. VW has paid out an estimated €33 billion, or $37 billion, in fines, penalties and settlements stemming from the September 2015 scandal. Litigation continues.
We'll conclude with a public service message: The third annual Automotive News supplier panel has been scheduled as part of the 2025 Automotive Golf Classic, which raises funds for the Boys & Girls Clubs of Southeastern Michigan. The panel discussion takes place at 9 a.m. EDT on June 16, an hour before tee time at St. John's Resort and The Cardinal in Plymouth, Mich. This year's panel will feature Paul Thomas, president of Bosch North America, along with Collin Shaw, president of MEMA Original Equipment Suppliers. For more information, reach out to pnussel@crain.com.
That's it for today. Have a great rest of your day.
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— Philip Nussel, online editor
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