ge5544402383279581579
John Mahoney19 Jun 2015
NEWS

Fiat Chrysler boss attempts GM merger by force

Fiat chief lobbies GM investors to strong-arm management to the negotiating table

Fiat Chrysler Automobiles (FCA) boss, Sergio Marchionne, has once again hit the headlines following news that his Italian-American car company has been lobbying major GM investors to force its management to start negotiating talks for a merger.

The backroom dealing, reported by newswire Reuters, follows GM’s CEO Mary Barra public rebuffing of any tie-up with FCA.

Marchionne for many months has argued that dramatic consolidation is vital in order for the global automotive industry to remain profitable.

The FCA boss claims billions could be saved by creating an auto giant because R&D costs from engineering new platforms, powertrains and state-of-the-art autonomous tech could be shared over the whole group, rather than by one brand.

Industry commentators have described Marchionne’s merger tactics as “beyond ambitious”, criticising the stratehy because the numbers just “don’t add up”.

FCA, according to Automotive Europe, is worth $US20 billion and had reported revenues last year of $US108 billion -- but it also has the highest debt in the car industry, of $US9.8 billion.

GM, meanwhile, is said to be worth $US57 billion and have annual revenues of $US156 billion.

Despite the numbers, Marchionne, a well-known risk taker, is unlikely to stop there in his ambition to create the world’s largest auto-maker and some within the industry still think a FCA/GM merger cannot be ruled out.

“Stranger things have happened”, said one stock market analyst.

Share this article
Our team of independent expert car reviewers and journalistsMeet the team
Stay up to dateBecome a carsales member and get the latest news, reviews and advice straight to your inbox.
Download the carsales app
    AppStoreDownloadGooglePlayDownload
    App Store and the Apple logo are trademarks of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.
    © CAR Group Ltd 1999-2024
    In the spirit of reconciliation we acknowledge the Traditional Custodians of Country throughout Australia and their connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.