In a move that sent shockwaves around the global auto industry,... Fiat Chrysler -- out of the blue -- has announced it's pulling the plug on its proposed multi-billion dollar merger Renault.
Hong Yoo tells us why.
Fiat Chrysler's proposed merger with Renault, which could have created the world's third largest automobile company, has collapsed on Wednesday.
In a statement, the Italian-American carmaker said "it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully".
Its plan to join forces with Renault collapsed after the French government, Renault's biggest shareholder, wasn't ready to sign off on a deal.
The French government had initially supported the proposal because of the money that could be saved by sharing research, purchasing and other activities.
But Renault's powerful labor union objected to a deal, worrying it could lead to layoffs if Fiat has the power to favor operations in Italy over France.
And the French government said it wouldn't support a 50-50 merger proposal unless Nissan, Renault's partner in the world's biggest auto alliance, guaranteed that its alliance with Renault would continue after the merger.
French Finance Minister Bruno Le Maire said that an agreement could not be reached between all partners in the negotiations on the government's conditions for a deal.
He requested more time, saying there was no need to rush through a deal and that the French government wants this merger to happen.

"And finally, we remain open to any industrial consolidation opportunity, but once again, in calm, without rushing, in order to guarantee the industrial interests of Renault and the French nation"

The merger would have saved the carmakers more than 5-point-6 billion dollars a year.
But Fiat walked away to look for another option as they had been urging Renault to do a quick deal.
Hong Yoo, Arirang News.