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FCA’s Marchionne Screams for Industry Consolidation

CEO says industry wastes half of capital spent.

by on Apr.29, 2015

FCA Chief Executive Sergio Marchionne reiterated his belief in the need for mergers and consolidation in the auto industry today.

The auto industry globally is failing to earn its cost of capital and needs a major reorganization that would allow major companies, such as Fiat Chrysler Automobiles NV, execute a sweeping consolidation of platforms, technology, and research and development, FCA Chief Executive Officer Sergio Marchionne insisted during a conference call with reporters and analysts.

Marchionne said his talk about the need for consolidation is quite serious and not flip.

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“We need to be brutally honest,” he said, while presenting a series of charts, showing the auto industry isn’t covering the cost of the capital it consumes in enormous quantity. (more…)