US: activist GM shareholder believes FCA deal should get the negative vote image

Harry Wilson, a former Obama auto task force member that advised GM on its bankruptcy exit back in 2009 and has recently turned activist when alongside hedge funds he persuaded the automaker to repurchase stock, doesn’t favor a merger between GM and FCA.

Wilson, which came into attention earlier this year as he managed to push the largest US automaker and the third biggest in the world to come up with a strategy to raise shareholder value by repurchasing $5 billion of its own stock, believes an agreement between GM and FCA, the third largest US automaker and the world’s seventh biggest, would not be a good idea. “I have no disrespect for Sergio Marchionne (CEO of FCA). He’s a really smart guy,” commented Wilson on CNBC during an interview. “It’s true that there’s a lot of misspent capital in the auto industry, but that is only part of the equation. The complexities of an auto merger are massive; historically, they have not had very good results.” The two automakers share a connection – they both went through taxpayer-funded bankruptcies.

Marchionne, chief executive of Fiat Chrysler Automobiles NV, said on numerous occasions that auto industry consolidation is needed, with the bottom line of his message being that FCA – and others – would be unable to keep up with the capital expenses needed to fund the investments into new products and technologies without establishing partnerships or merging with a larger peer. But GM CEO Mary Barra and her board of directors have said on numerous separate occasions that Marchionne’s proposal has been studied and ultimately the company decided not to proceed with any talks.