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Marchionne recruiting activist investors to prompt GM merger

Sergio Marchionne may have been rebuffed in his previous advances at General Motors, but he's not about to give up that easily. According to The Wall Street Journal, the Fiat Chrysler chief is now turning to activist investors to help coax GM into joining forces. Marchionne has been a staunch and ceaseless advocate of the need for consolidation, arguing that the industry needs to amalgamate into larger groups that will share resources and reduce overhead. Under his leadership, the Fiat group consolidated its own operations, and officially merged with Chrysler last year. But he's also been pursuing additional mergers with the likes of Volkswagen, Peugeot, Ford, and Opel (to name just a few). Now he's pursuing a merger with GM, which has not shown much enthusiasm towards the idea. For one thing, GM is a much larger company, and probably doesn't need FCA as much as FCA needs it. For another, it has a troubled past with Marchionne, who in 2005 dissolved an agreed merger (of sorts) with GM, yet still managed to get the General to pay Fiat some $2 billion in the process. However, Marchionne is evidently hoping that the intervention of activist investors could compel GM CEO Mary Barra and company to proceed with a merger anyway. For precedent, he's looking at the recent negotiation between GM and some of its stakeholders that prompted the company to buy back $5 billion of its own shares, demonstrating Barra's willingness to deal with investors. The more compelling precedent, however, may have been set in 2006, when activist investor Kirk Kerkorian locked arms with Carlos Ghosn to get GM to consider joining the alliance between Renault and Nissan. GM ultimately declined, and Ghosn turned instead of Daimler (which of course has its own history of having merged with Chrysler). Only time will tell if this initiative will prove more successful, but one thing's for sure, and that's that Marchionne isn't about to relent in his pursuit of a major merger partner.

Fiat Chrysler and Renault are in advanced partnership talks

Fiat Chrysler Automobiles and Renault are in advanced discussions about a possible alliance, according to a report from the Financial Times citing an anonymous "person familiar with the matter." The news isn't particularly surprising, as FCA has been a constant subject of merger and alliance talks for as long as many of us can remember. We've reported on a potential tie-up between these two automakers several times, as far back as 2008 and as recently as two months ago. FCA CEO Mike Manley has mentioned the company's openness to merging with another automaker. At the Geneva Motor Show a few months back, he said, "We have a strong independent future, but if there is a partnership, a relationship or a merger which strengthens that future, I will look at that." It's no secret that FCA is much stronger in the United States than it is in Europe. For its part, Renault has basically zero presence in the United States. A partnership or potential alliance between the two could shore up each automaker's weak spots and allow the group to split investment money into new technologies, including electric vehicles and autonomy. Of course, Renault is already tied up with Nissan and Mitsubishi, but that partnership has been a little tattered since the arrest of former Nissan and Renault CEO Carlos Ghosn on charges of financial misconduct in Japan. And in addition to Renault, FCA is understood to have discussed various partnership strategies with the PSA Peugeot Citroen group. What a final agreement – if there's any agreement at all – could look like between the two global automakers remains to be seen, and the report from Financial Times cautions that many different options for FCA and Renault are currently on the table. In other words, stay tuned.

Marchionne emailed Barra about merger between FCA and GM

Sergio Marchionne is adamant that global automakers will have to merge to remain profitable in the near future, and he'll tell that to anyone who's listening. Mary Barra, however, is not interested. According to The New York Times, the Fiat-Chrysler chief proposed a merger with General Motors via email to his counterpart back in March. Marchionne proposed meeting to discuss the matter, but Barra and her team reportedly rejected even entertaining the idea. This of course is not the first time Marchionne has raised the idea of a merger. He masterminded the marriage between Fiat and Chrysler, and reports have since suggested further mergers with Volkswagen, Peugeot, Ford, and others – including GM's own Opel unit. Some have taken his calls for consolidation as a weakness, but Marchionne insists that his empire is in good health – and that it's the industry as a whole which is in an untenable position. According to his view, automakers around the world need to align themselves into larger groups in order to reduce redundancy in investment, development and infrastructure – the duplication of which he terms as wasteful. "It's fundamentally immoral to allow for that waste to continue unchecked," said Marchionne to the Times. "I think it is absolutely clear that the amount of capital waste that's going on in this industry is something that certainly requires remedy," he said in a conference call with industry analysts late last month following the rejected GM approach. "A remedy in our view is through consolidation." News Source: The New York TimesImage Credit: Paul Sancya/AP Chrysler Fiat GM Sergio Marchionne merger fiat chrysler automobiles