FCA CEO Fuels Talk of GM Merger
#1
08-31-2015, 03:09 PM
FCA CEO Fuels Talk of GM Merger
Fiat Chrysler CEO Fuels Talk of GM Merger
By Matthew Rocco
Published August 31, 2015FOXBusiness
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(Reuters)
Sergio Marchionne, chief executive of Fiat Chrysler Automobiles (FCAU
FCAU
), is keeping up his campaign to merge the automaker with General Motors (GM<a class="hover" href="http://quote.foxbusiness.com/symbol/GM/snapshot"> GM
).
Marchionne has publicly pushed for consolidation, citing rising production costs among other reasons, ever since overseeing the merger of Fiat and Chrysler. He has eyed a potential combination of FCA and GM, even proposing a merger in an email to GM CEO Mary Barra. GM turned down the overture.
In a new report from industry publication Automotive News, Marchionne did not go as far as saying FCA would embark on a hostile bid. “There are varying degrees of hugs,” he added.
But the Italian-Canadian CEO said “it would be unconscionable not to force a partner,” and he added that FCA’s board must put pressure on GM to engage in discussions.
FCA has crunched the numbers, Marchionne said, and merging the company with larger rival GM would create a single automaker with $30 billion in earnings before interest, taxes, depreciation and amortization (EBITDA).
Marchionne noted that GM has so far refused to go through the numbers with him.
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“I’m not trying to date Mary, for the record, but I tried to get to see her,” he said.
Meanwhile, Automotive News cited an unnamed high-ranking GM executive who said, “Why should [GM] bail out FCA?”
“Our management and board are always working to maximize shareholder value,” GM said in a statement provided to FOXBusiness.com. “After we completed a thorough review of a possible merger with FCA, we concluded that executing our current plan is the best way to create value for GM stockholders.”
In June, Barra dismissed talk of merging with FCA, the least profitable of Detroit’s Big Three. Barra said GM is already large enough to manage costs.
GM shares, down 16% since the start of 2015, rose 1.6% in the wake of Marchionne’s comments. FCA slipped 1.7% early Monday.
Follow Matthew Rocco on Twitter @MatthewRocco
By Matthew Rocco
Published August 31, 2015FOXBusiness
Facebook153 Twitter146 livefyre Email Print
(Reuters)Sergio Marchionne, chief executive of Fiat Chrysler Automobiles (FCAU
FCAU), is keeping up his campaign to merge the automaker with General Motors (GM<a class="hover" href="http://quote.foxbusiness.com/symbol/GM/snapshot">
GM).
Marchionne has publicly pushed for consolidation, citing rising production costs among other reasons, ever since overseeing the merger of Fiat and Chrysler. He has eyed a potential combination of FCA and GM, even proposing a merger in an email to GM CEO Mary Barra. GM turned down the overture.
In a new report from industry publication Automotive News, Marchionne did not go as far as saying FCA would embark on a hostile bid. “There are varying degrees of hugs,” he added.
But the Italian-Canadian CEO said “it would be unconscionable not to force a partner,” and he added that FCA’s board must put pressure on GM to engage in discussions.
FCA has crunched the numbers, Marchionne said, and merging the company with larger rival GM would create a single automaker with $30 billion in earnings before interest, taxes, depreciation and amortization (EBITDA).
Marchionne noted that GM has so far refused to go through the numbers with him.
“I’m not trying to date Mary, for the record, but I tried to get to see her,” he said.
Meanwhile, Automotive News cited an unnamed high-ranking GM executive who said, “Why should [GM] bail out FCA?”
“Our management and board are always working to maximize shareholder value,” GM said in a statement provided to FOXBusiness.com. “After we completed a thorough review of a possible merger with FCA, we concluded that executing our current plan is the best way to create value for GM stockholders.”
In June, Barra dismissed talk of merging with FCA, the least profitable of Detroit’s Big Three. Barra said GM is already large enough to manage costs.
GM shares, down 16% since the start of 2015, rose 1.6% in the wake of Marchionne’s comments. FCA slipped 1.7% early Monday.
Follow Matthew Rocco on Twitter @MatthewRocco
#2
10-15-2015, 11:31 PM
Record Breaker
I've got a great idea. How about, spin off Chrysler as a separate company, merge FIAT with GM with Berra in charge, discontinue FIAT, Alfa-Romero, Maserati, and problem resolved once and for all. Seriously though, GM and FCA merger would be a disaster. They have exactly the same weaknesses and the exact same strengths. I could see a merger with Mazda as Mazda has a better I4 program and a better compact and midsized car program than we currently do with FIAT technology, and we have a V6 to replace the Ford V6s, we have a truck program, a full sized sedan program, a minivan program, a better SUV program, etc. Suzuki as some have suggested in my eyes would be a mistake as Suzuki just left the U.S. because they were not competitive and their technology would do little to help us out if i was not competitive enough to make it here let alone their poor reliability reputation. Mitsubishi would be a mistake as well as the stuff we used from them last time was sorely uncompetitive. They aren't the company they were in the 70s, 80s, or 90s, and even then aside from some DSM coupes they were not very good sellers via badge engineering. I could see how one could work with Ford IF Ford was interested (they are not), as Ford has the same strengths as Mazda (due to using same tech), the main thing Ford needs is a more competitive large RWD program, some more interesting brands with much better utilization, and getting away from the EcoBoosting scheme.
#3
10-16-2015, 01:08 PM
