Fiat Chrysler's Sergio Marchionne Wanted To Merge With GM, But Got Shot Down By Mary Barra

May 25, 2015

Sergio Marchionne hasn't exactly been quiet about his desire to merge Fiat Chrysler Automobiles with another car company. Last summer, he floated the idea of joining forces with Volkswagen, but that deal was subsequently sunk.

More recently, the New York Times reports that FCA's CEO has been looking for pals on this side of the pond. In fact, just two months ago, in March, he proposed an arranged marriage with cross-town rival General Motors.

ALSO SEE: Audi A3 Vs. Mercedes-Benz CLA: Compare Cars

News of the pitch comes from two industry insiders with knowledge of the situation. It's unclear how they came to learn of Marchionne's request -- whether they worked for FCA or GM or some other party. What is clear, however, is that the pitch was a little weird.

First, it came out of the blue. There had been no PowerPoint presentations, no conference calls, no meet-ups between the two companies' boards. The pitch just came.

Second, it came via email. Yes, you and I have found marriage proposals from Nigerian princes littering our inboxes many times before, but not requests to tie up two multi-billion-dollar international corporations.

CHECK OUT: 2016 Ford F-150 Adds Fuss-Free Auto-Steering For Trailer Backup

Third, the email went directly to Mary Barra, whom Marchionne had never met. Which makes it sound like the weirdest "Missed Connections" ad ever: "Me: Bespectacled, chain-smoking CEO of a European-American auto company. You: Brunette, longtime industry worker who landed in the corner office just before things hit the fan. I've seen you at auto shows. You've seen me. Let's hook up."

To be sure, the email made an impression, and by all accounts, Barra discussed the pros and cons of a GM-FCA merger with her key staff and board members. However, in fairly short order, she sent Marchionne a rejection letter, denying his request for a face-to-face meeting on the matter.

But while Marchionne may have taken GM off his list of potential mates, he's continuing to talk about match-ups. 

Why is he so obsessed? Why the urge to merge? Two reasons:

1. FCA isn't performing as well as many of its competitors, even though it has a couple of strong brands -- especially Jeep. Partnering with another automaker would give the partner a number of good auto lines and give FCA more capital.

2. FCA needs that capital because of what Marchionne sees as wasteful duplication of energies and efforts among automakers. If companies banded together, he argues, they could share the cost of powertrain development, infotainment, and so on -- not to mention the cost of new regulatory requirements.

It's a fascinating article that includes several interviews with the CEO himself. If you have time this Memorial Day, it's well worth a read. 

___________________________________________

Follow The Car Connection on FacebookTwitter and Google+.

2019
The Car Connection
See the winners »
2019
The Car Connection
 
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from the site. I can withdraw my consent at any time by unsubscribing.
Thank you! Please check your email for confirmation.