It seems Fiat-Chrysler Automobiles may be putting merger talks to rest, for now. Although the media has mostly covered FCA CEO Sergio Marchionne and his outspoken attempts to find a partner, it’s the man behind the scenes who is also quite adamant on partnering with General Motors.
John Elkann, chairman of FCA, doesn’t plan on giving up on the idea. In fact, he says patience is a virtue in this situation, despite being rebuffed not only in 2015, but also in 2012.
The report comes from The Wall Street Journal, which says a deal with GM would be “the crowning achievement” for Elkann, who has transformed his family’s holding company and diversified outside of Europe.
“GM has not been put to rest,” said Elkann at a boardroom meeting in Milan, Italy. “GM is not the only option, but no doubt from a feasibility and quantum point of view it is by far the best.”
Analysts have cried fowl at the idea, saying the repeated calls for merging signifies weakness in FCA and their future operations. The lack of investment in new product, and product delays, also makes for a troublesome situation with the automaker. That’s not to mention weak profit margins, high debt counts and nearly no presence in China.
But Elkann points to missed opportunities, as both companies’ shares have grown significantly, and FCA brands such as Jeep and Maserati have grown tremendously since 2012. That still leaves Chrysler in the doldrums, however.
A General Motors spokesperson once again reiterated their lack of enthusiasm around the idea, completely dispelling the notion. But Elkann says 2017, or 2018, is when he’d like to resume talks.
That is, if there are any talks to truly be had.
Comments
The reason they are giving up is because Sergios big plan on going after the activist investor’s backfired on him when even they said they were not interested. Even the guy that wanted the share re-purchase deal from GM earlier this year said its a bad idea. Hopefully FCA is either merged with someone else or gone altogether in the next few years so we don’t have to hear of this again.
Of course he wants a merger with GM. GM has all the technology they want and need. But they have almost nothing to offer GM.
FCA wants to merge because GM is the largest manufacturer in the world, well if they wanna merge with someone in the top 3 they can merge with Toyota. FCA will never take my brand from me.
It really seems delusional to think that a GM/FCA merger is in the best interests of either company. It’s funny how many pro GM people think FCA is dead weight with only the benefit of having Jeep (and even that can be addressed with the right new products from GMC). Yet, most pro FCA people (allparnews.com for instance) think that GM will destroy their beloved brands. Some Mopar fans even think (audaciously) that GM doesn’t have anything to offer FCA. lol
Right now, FCA seems to be in the same shape as GM circa 2004. 4 years from now, they could be hemorrhaging cash with little to show for it. If that turns out to be prophetic, the future will have even fewer willing to be their savior.
I’m thinking this FCA Merger interest is a sly form of marketing. Many here believe that FCA is inferior to GM, and I agree.
Y’all see it as a technology thing. I’m not informed enough to know one way or the other there, so I glance at Consumer Reports. 2 out of 18 FCA vehicles are recommends. In contrast, GM offers 34 cars… 12 are recommends.
It’s not even a contest. I’m having trouble finding the perfect analogy here, but it’s like Tim Hortons talking about a merger with Dunkin Donuts. Sears talking about a merger with Macys. HP talking about merger with Dell. There’s something arrogant and delusional about such ‘interest’.
“We’ll put merger talks to rest for now,” FCA says. GM shouldn’t tolerate such talk. It should put FCA back in it’s place.
Otherwise people might consider both companies similar, which again, is all I think FCA is ultimately up to. Bring up our brand, lower GMs in one move.
If anything I might see Ford interested in acquiring Jeep. That’s about it. GM is fine where they are. If America became Ford and GM, both companies would be stronger with FCA gone. And by the by, CR has Ford at 3 out of 22 cars recommended.
If more Americans knew these numbers — things could change even better for GM. If that Chevy Cruze could become a CR recommend, wow.
FSA should trim its crap and merge with Suzuki.
This is simply about a man named Sergio that is watching his Fiat melt away as he takes the profits from Chrysler and thinks he will increase sales of Alfa from 68,000 to 400,000 by 2018.
Chrysler with the right leadership could be saved but Sergio is out in his sweater milking Chrysler for money to pour into Fiat and its brothers only to see it take them all down.
This is far from a publicity gimmick as Sergio’s public plea is very pathetic and has done nothing but damage FCA in the eyes of many consumers and most in the financial and auto industry. For someone to make a move like this they are either an idiot or very desperate. Talks like these are done behind closed doors for a reason.