Fiat's Sergio MarchionneEnlarge Photo
The large automotive entity known as Fiat Chrysler Automobiles [NYSE:FCAU] has been in the news as of late, and it's not because of Hellcat goodness. Okay, there's actually still a bit of Hellcat-related news out there thanks to the upcoming Jeep Grand Cherokee Trackhawk. This isn't the main reason why FCA has been making headlines, though.
CEO Sergio Marchionne has been putting it out there that he'd like to see a massive merger between his company and General Motors Company [NYSE:GM]. According to Automotive News (subscription required), Marchionne has said that he's crunched the numbers and sees tremendous upside to bringing these two companies together. GM, meanwhile, is giving this one a big 'ole thumbs down.
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Marchionne has apparently gone through the entire product lineups of both automakers, examined the various production facilities and their locations, and found that such a merger would be a smart move that could make $30 billion a year. GM views it as a bailout for FCA, which has substantial debt levels and a costly new vehicle development schedule, and understandably doesn't appear at all interested in chatting further. Still, despite the cold shoulder from GM, Marchionne appears determined to continue the effort even if it's very one-sided at the moment.
His claims are that the potential profits from joining forces are far greater than the two companies now earn on their own. Additionally, the two companies coming together would see "cataclysmic change in performance," according to the FCA CEO. He seems surprised that GM isn't just refusing the deal, but refusing to even listen to the discussion.
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While it makes for interesting discussions among automotive insiders, we don't see GM jumping up to get this moving forward anytime soon. There will be no Hellcat Silverados or Fiat ZR1s in the foreseeable future.