Sergio Marchionne simply doesn’t know that “no” means “no”. The Fiat-Chrysler CEO’s advances to marge with GM have been rebuffed time and time again, but he’s not about to give up. Instead, he’s reportedly now turning to activist investors to persuade The General into joining forces.
Marchionne’s strategy isn’t without precedent: earlier this year, activist investor Harry Wilson, backed by a group of hedge funds, pushed General Motors to initiate a $5 billion buy back of its own shares and to create a capital allocation framework that would see the company return some of its free cash to shareholders. The situation has shown that GM CEO Mary Barra is willing to deal with investors, at least on some level.
Another, perhaps more noteworthy precedent, was set in 2006 when activist investor Kirk Kerkorian partnered with Carlos Ghosn to persuade GM to join the Renault-Nissan alliance. After much commotion, The General ultimately declined the offer, causing Ghosn to turn to Mercedes-Benz parent Daimler, which has the infamously-unsuccessful history of merging with Chrysler. Even so, the occasion still shows that GM will at least look into matters presented by activist investors.
For his part, Marchionne has been on a crusade to get automakers to consolidate into larger groups that can share resources and reduce overhead. Under his leadership, Fiat completed purchasing and consolidating with Chrysler in 2014. Even so, Marchionne has also been courting Volkswagen, Peugeot, Ford, and GM’s own Opel, among others.
We’ll see if Marchionne will be successful in his newfound initiative to merge with GM by way of activist investors. But something tells us that he will continue pursuing other automakers as well. Perhaps he’ll have more luck on Tinder instead.