Marchionne Hearing Wedding Bells By 2018, No Marriage With Opel

Cameron Aubernon
by Cameron Aubernon

FCA CEO Sergio Marchionne believes consolidation will occur as early as 2018. Meanwhile, Opel won’t be taking FCA’s hand in marriage.

Opel CEO Karl-Thomas Neumann stated a merger between his company and FCA was not going to happen, though he agreed with Marchionne in principle regarding such mergers, Reuters reports, especially in regards to volume, scale and utilisation.

Opel’s decision to remain within the General Motors family follows a similar rebuff by GM CEO Mary Barra, who received an email from Marchionne in March suggesting the two combine forces. When asked about the email on a recent visit to FCA’s factory in Melfi, Italy, Marchionne said he writes “lots of emails,” adding he doesn’t talk about such major decisions as consolidation via email.

Meanwhile, Marchionne is holding onto the idea of consolidation overall, believing the industry will see the first occurrence as early as 2018. He didn’t specify his company would be the one heading down the aisle in said consolidation, however.

[Source: neekoh.fl/ Flickr/ CC BY 2.0]

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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  • Anomaly149 Anomaly149 on May 28, 2015

    The answer is probably (or should probably be) Suzuki. FCA isn't what it ought to be in southeast Asia or India, and a tie-up with Suzuki would be good for both. Tata doesn't offer much (FCA really doesn't need JLR to compete with their other in-house luxury brands). Mitsubishi, Subaru, and Mazda probably have keiretsu behind them too powerful to be bought. No one else is appealing (Germans, French) or likely interested (Japanese Big 3, GM, Ford, Hyundai-Kia). They also need to get their Chinese in-market tie-ups to be more than just stringing GAC along for slightly less terrible import hurdles.

  • Z9 Z9 on May 28, 2015

    I'm pretty sure I saw that exact Cinquecento when walking around Rome a few years ago. The above comment about the Agnelli family's interests is probably very close to the real story. Italy is a family business culture more than an entrepreneurial culture. By the time a business passes to a third or fourth generation, there isn't always a lot of motivation to increase market share or take risks. The primary motivation is to preserve the asset pool.

    • See 1 previous
    • 28-Cars-Later 28-Cars-Later on May 29, 2015

      @Lorenzo "Sergio now has to find a way to hand off FCA to a merger partner and enable Exor to dump its 31% stake." Bingo.

  • Seanx37 Seanx37 on May 28, 2015

    Marchionne is correct in that there needs to be more consolidation. The problem is what happens then. A GM/FCA merger would be a disaster. Espcially here in SE Michigan. A Hyundai/KIA/FCA might make sense. Really, just for Jeep/Ram. And that is the issue with every possible merger. The only thing of FCA that make sense are Jeep/Ram and Ferrari. That is all anyone would want of them.

  • VolandoBajo VolandoBajo on May 30, 2015

    The fact that Sergio may be right that the industry needs more consolidation, does not mean that consolidation will necessarily take place. He just has to keep whistling that tune, as he has no other in his list of available songs to sing. People in Hell need ice water, but that doesn't mean that they are going to get it. And the industry (or at least FCA) needs consolidation, to bail out their position vis a vis the Agnelli family and Cerberus, but that doesn't mean that it will necessarily ever occur. Though I'm sure Sergio wishes that people like us who see what the emperor is clothed in would just shut up and go away, so he can market his new line of merchandise, which consists, in his mind, of not just cars, but an entire company. A bad deal is not made into a good deal merely because one party desperately needs it, or would greatly benefit from it. The Washington Redskins would be a better team if they had a more stable QB situation, but that doesn't mean some other team is going to offer them a solution to that problem, either. For a deal to take place it has to at least appear beneficial to both sides...which is a big problem for FCA, as can be seen by failure of other industry leaders to even enter into serious talks about corporate marriage. Sergio is somewhat like the old Classics Illustrated comic books tale (I believe it was a Dickens tale, but perhaps Poe?) about a man who was tricked into buying a magic lantern for a penny. The catch was that he had to sell it for less than he paid for it, before he died, or else his soul would belong to Satan. So after much rending of garments and gnashing of teeth, he found a way to trick the person who sold it to him into buying it back as part of a package deal, for a half-penny, in one of the few places in the world where there were half-penny coins. Unfortunately for Sergio, he cannot seem to find anyone who is willing or able to buy into his company, even at the lowest price he is able to cut for the deal. And if this remains so, his fate is already sealed, though he continues to collect his salary and bonuses while he sits at the helm of an apparently doomed ship. Unless he sells a boatload of Hellcat engines, which would explain his desire to offer that engine in multiple vehicles. He could even cut the price on the TrailHawk a bit, I would bet, though that might not even be necessary, as he does enjoy a very good margin on that vehicle. The real question becomes can he keep the ship afloat long enough to make the Jeep/Ram franchise so profitable that he can move the whole thing without taking a financial bath. Even if it results in the death of Fiat, Chrysler and the rest, if he can package it up to get his price, he wins. Unfortunately, it will be an uphill battle all the way, and he is unlikely to find another player with both the liquid assets and the desire/knowhow to play that game.

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