NYT: GM's Barra Declined Meeting With FCA's Marchionne to Discuss Possible Merger
Sergio Marchionne sent Mary Barra a detailed email in the middle of March in an effort to start merger talks. Barra, CEO of General Motors, was uninterested in the offer and rebuffed Marchionne, CEO of Fiat Chrysler Automobiles.
It was the first time the two executives had ever spoken, but it wouldn’t be the last Barra would hear of Marchionne’s merger desires.
That’s the story being told by the New York Times today, detailing the lengths to which Marchionne is going to trigger consolidation within the automotive industry.
During a routine analyst conference call on April 29, Marchionne brought his plea to other executives through the media with a 25-page PowerPoint presentation.
“I think it is absolutely clear that the amount of capital waste that’s going on in this industry is something that certainly requires remedy. A remedy in our view is through consolidation,” Marchionne said.
Marchionne’s overture of a merger with GM includes no less than 14 brands between North America and Europe, not including the many other brands each company markets in China and other emerging regions. But, to date, the overture has been played to an audience wearing earplugs.
Even with the vast number of brands, that isn’t what bothers Marchionne. Instead, it’s the amount of money poured into redundant R&D work that could be shared by multiple automakers.
“It’s fundamentally immoral to allow for that waste to continue unchecked,” he said.
[Source: New York Times]
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The last time General Motors and Fiat tried some kind of a joint venture, General Motors ended up giving Fiat two billion dollars to go away. Maybe Sergio is trying to repeat that deal again in the hope of getting another cash infusion. Hopefully, GM has learned from its errors; it sounds like Ms. Barra wants no part of Sergio or his schemes.
I actually like a lot of FCA cars, even more than GM. However I find all this very embarrassing and demeaning for FCA. Why would they ever even consider this? GM of all places? Would FCA be better off streamlining or getting rid of or selling unproductive assets?
A crappy car behemoth like that would probably face obstacles also from competition watchers in the governments concerned?
FCA's only hope is to lobby for a $1/gallon federal gasoline excise tax as a replacement for CAFE 2025. They don't have the technology portfolio to reach the standards. It's not even close.