Fans of HBO’s hit show The Wire will remember The New Day Co-Op, a coalition of Baltimore heroin dealers who band together in part to get better deals on their drug supply and remain strong against law enforcement and rival gangsters. Half a world a way, a similar proposal was floated by Fiat CEO Sergio Marchionne, but never came to pass.
A report by Bloomberg outlined Marchionne’s vision to take on Volkswagen. It involved PSA, Opel and lots of money.
Marchionne proposed that Peugeot commit to a combination between Fiat, the French carmaker and GM’s German Opel unit in exchange for stock in the new entity, said the people, who asked not to be named as the proposal was private. The CEO also offered to take Opel as part of the deal if he got $5 billion to $7 billion to restructure the unit, two of the people said.
A combination would have given the new entity more heft to compete with Volkswagen as the industry weathers the sovereign- debt crisis. Together, Fiat, Peugeot and Opel account for 25 percent of the region’s auto sales, topping VW’s 24.8 percent share.
The big reason for PSA’s hesitancy was the lack of technology brought to the table by Fiat, saddled with more exposure to countries like Spain and Italy. Apparently, partnering with GM is preferable. Who knew?