This week at the 2015 North American International Auto Show in Detroit, General Motors North American President Alan Batey said he didn’t feel GM needed to merge with another company to cut production costs, instead preferring to collaborate with companies that have shared goals.
“We collaborate if we find partners with similar needs and requirements,” Batey told WardsAuto. “We have scale. We are truly global. We’re able to think globally. In the future, I don’t see that changing.” Look no further than GM’s deal with Honda over hydrogen fuel cell development, for example.
This is in contrast to the opinion of CEO of FCA US Sergio Marchionne, who feels that consolidation is unavoidable in an industry that is capital-intensive, adding that investors tend to undervalue auto stocks: “The cost of executing (product launches) is in excess of what a mature industry is able to afford. Look at how capital markets value auto stocks. We are assigned incredibly poor valuation.”
Batey feels that most “true mergers” over the past 20 years have been difficult to execute, eventually unravelling. Instead, GM will likely continue the path of collaboration, as it does with Ford on transmissions for America, and PSA Peugeot Citroen on European vehicle platforms.
“Rather than mergers, it’s about collaboration around specific technologies, components or requirements,” he said.