For a global consolidation in the auto industry, Fiat Chrysler Automobiles wants the American General Motors group to take over it.
For Europe, however, this idea does not make too much sense and is unlikely to happen, as the whole plan looks more like an insurance policy for FCA, rather than represent a beneficial deal for GM.
GM CEO, Mary Barra, will be in Frankfurt for the auto show that is taking place this week, but she is unlikely to change her opposition to a deal with FCA.
For the indebted manufacturer FCA, the deal would be a great milestone. Marchionne, the chief of FCA, has said in his Confessions of a Capital Junkie speech last April that the merge would bail FCA out of a not so good financial situation and bring a global consolidation in the auto industry. He has also said recently, that according to his research, the deal would result in big synergies and savings for both parties.
Marchionne stated for Automotive News that “Look, the combined entity can make $30 billion a year in cash. Thirty. Just think about that number. In steady-state environments, it’ll make me $28 to $30 billion.”
Compared to past situations, a merger might not happen as previous attempts of auto mergers did not come to being despite debates and discussions, and two examples would be Daimler-Chrysler and BMW-Rover.
General Motors said that it is happy with its size at the moment and its business plan. Professor David Bailey at the Aston Business School has explained that while FCA definitely needs another partner, it is not in a position to force GM to join their business.