For months, Sergio Marchionne has spoken very publicly about wanting to merge Fiat Chrysler Automobiles with General Motors. Some have worried that FCA's CEO might resort to drastic measures to achieve his dream, but it appears he's finally given up -- at least for the next five years.
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Then, early in 2015, Marchionne sent an email to GM's Mary Barra, whom he'd never met. He made his case for a merger, and Barra debated the proposal with others at GM, but ultimately, she declined his offer.
In June, Marchionne began discussing the matter in the media. He insisted that merging FCA and GM would benefit both companies, and he made it abundantly clear that he was exploring a range of options to make the marriage happen, including a hostile takeover.
Now, however, the CEO has changed his tune. Speaking to journalists yesterday, he said that he had no intention of pursuing the union -- at least not at the moment. Acknowledging GM's unwillingness to partner up, Marchionne said, "This is not an indiscriminate dating game. I'm not willing to go with anybody to get it done".
In contrast to the decidedly anxious, urgent tone he's stuck before, Marchionne appeared more confident this week. He said that FCA is in "relatively decent shape", and that it would invest the next five years and $52 billion in making Alfa Romeo, Jeep, and Maserati global brands. When the process is complete, FCA will reevaluate how -- and if -- it needs to merge with another automaker.
In the meantime, Marchionne suggested that FCA may align with less-likely companies to streamline production and boost revenue. He didn't name names, but PSA Peugeot Citroen is one possibility that's been floated before.
Marchionne isn't a grandstander. By all accounts, he's a fairly straight-shooter who's not afraid to assess matters honestly, even when the microphones are on.
So, unlike other CEOs and division heads, Marchionne probably didn't make this "Oh, we didn't want to merge with them anyway" statement to save face. More likely, he simply realized that it's not going to happen -- at least not without a lot of blood, sweat, and tears -- and he's going to focus instead on other things.
We agree that consolidation is an important trend -- one that we're seeing in many industries, not just the auto world. So we wouldn't be surprised if FCA wound up joining forces with some other company down the line, just as Chrysler once did with Daimler.
Will FCA's partner be GM? We can't say.
Perhaps a bigger question is whether Marchionne & Co. will be able to broaden the appeal of Alfa Romeo and Maserati from their current niche markets and make them larger, more globally respected brands. Jeep is essentially a no-brainer, but the other two? That's a subject for a different article -- though given FCA's debt of $8.5 billion, analysts aren't convinced. You can share your own thoughts in the comments below.