Marchionne Planning Shotgun Wedding For FCA With General Motors

Cameron Aubernon
by Cameron Aubernon
marchionne planning shotgun wedding for fca with general motors

How desperate has FCA CEO Sergio Marchionne become about marrying off his company? He’s asking activist investors to prod General Motors to the chapel.

Marchionne recently began reaching out to hedge funds and other activist investors to help bring FCA and GM (or a European automaker) together to consolidate resources, Wall Street Journal reports.

The search, which is coming up blank thus far, is the latest in the CEO’s attempt to find a happy ending for his increasingly desperate romantic tragicomedy film, fearing excess production and duplicate costs in engineering, R&D et al threaten future profitability of the overall industry.

For now, though, FCA’s low profit margins do not make for a good partner with stronger players, while Marchionne’s dealings with GM leave much to be desired. In 2005, he convinced the Detroit automaker to pay $2 billion to not buy Fiat — in hospice care by then — a move which also dissolved a five-year-old partnership to produce engines and transmissions together.

More recently, Marchionne attempted to woo GM back with an email to CEO Mary Barra suggesting as much. The automaker is transitioning its lineup to global architectures and can build said lineup on a broader scale than FCA. GM is also undergoing an internal consolidation to further boost profits, a plan Barra and others in management won’t allow to be derailed by outside distractions like Marchionne holding up a boombox in front of the RenCen playing Peter Gabriel, hoping GM will say anything but no.

However, Barra’s recent dealings with activist investors over a share buyback of $8 billion — resulting in a $5 billion buyback with no further issues regarding board seats — has given Marchionne hope for his own cause, which could become more aggressive with every breath GM takes.

[Photo credit: hamster!/Flickr/ CC BY-ND 2.0]

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  • Jpolicke Jpolicke on Jun 10, 2015

    I realize there are many fans of GM out there. I am not interested in picking a fight with you, or trying to undermine your love of the brand. I accept that it exists and respect your right to your opinions. That said, I want nothing to do with anything made by GM, for which I have nothing but contempt. How they manage to maintain their preeminent market share is a mystery to me. I am a highly satisfied FCA customer with 3 of their products in the family, but if GM gets their hands on them I'll be going back to Japanese/Korean product. (Been burned once too many times by Ford.)

    • Corey Lewis Corey Lewis on Jun 10, 2015

      I think GM is making some good cars currently. Their 3.6 isn't what the 3800 was (ie. they should still be using the 3800), but many of their cars are solid. I'm not someone who would've said that five years ago.

  • GeneralMalaise GeneralMalaise on Jun 10, 2015

    Ms. Barra should've kept her pie hole shut to help GM stock prices.

  • NormSV650 I had a 2014 Vsport back in the day. It have a quiver feeling over some bumps in turns. Currently have a 2018 CT6 it is very solid and a great driver's car for the size.
  • NormSV650 I had a 2014 Vsport back in the day. It have a quiver feeling over some bumps in turns. Currently have a 2018 CT6 it is very solid and a great driver's car for the size.
  • MaintenanceCosts I saw my first IS500 out in the wild today (a dark-grey-on-black example) and it struck me that it was much more AMG-like than this product. (Great-looking and -sounding car.)
  • ToolGuy
  • Art Vandelay Props for trying something different. EVs should work well in this sort of race. The similar series running ICE run short distances like that