{"id":98084,"date":"2015-08-31T10:15:14","date_gmt":"2015-08-31T14:15:14","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=98084"},"modified":"2015-08-31T02:28:57","modified_gmt":"2015-08-31T06:28:57","slug":"despite-rejection-marchionne-is-still-pressing-gm-for-partnership","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2015\/08\/despite-rejection-marchionne-is-still-pressing-gm-for-partnership\/","title":{"rendered":"Despite Rejection Marchionne is Still Pressing GM for Partnership"},"content":{"rendered":"
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FCA Chief Sergio Marchionne has an offer he doesn't think GM can refuse - though, so far, it has.<\/figcaption><\/figure>\n

Fiat Chrysler Automobiles CEO Sergio Marchionne isn\u2019t one to readily take \u201cno\u201d for an answer, especially when it\u2019s coming from General Motors as a rejection to his proposed partnership.<\/p>\n

GM CEO Mary Barra and other officials have repeatedly said the Detroit giant has no interest in merging with FCA, a move Marchionne suggested would help both companies cope in an increasingly crowded and competitive global car market. But Marchionne is warning he may press ahead with an alliance whose logic, he said, is \u201cirrefutable.\u201d<\/p>\n

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Sound Off!<\/figcaption><\/figure>\n

Saying his board is looking for ways to get a more positive response from GM, Marchionne said what he had in mind is \u201cnot hostile,\u201d but sounded a lot like it, the FCA chief telling Automotive News, \u201cThere are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you.<\/p>\n

\u201cEverything starts with physical contact,\u201d he continued, \u201cThen it can degrade, but it starts with physical contact.\u201d<\/p>\n

For the moment, it seems, whatever relationship there was between the two companies clearly has degraded. Marchionne said GM officials won\u2019t even take his calls.<\/p>\n

(Marchionne may soon add Ferrari CEO to his list of titles. <\/em>Click Here<\/span><\/a> for more<\/em>.) <\/em><\/strong><\/p>\n

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General Motors CEO Mary Barra has said she sees no reason to consider FCA's proposal.<\/figcaption><\/figure>\n

The Italian-born, Canadian-educated executive has long been warning about the problems the industry is facing, calling for a cutback in excess European capacity, for example, and more recently insisting that there are simply too many different carmakers vying for a piece of the global pie. That formula, he said, doesn\u2019t allow manufacturers to get the financial returns to justify all the capital they are investing.<\/p>\n

But like the Cassandra of Greek myth, Marchionne\u2019s warnings have largely fallen on deaf ears. While industry insiders suggest the FCA CEO has tried to interest a number of competitors in a partnership, none has so far shown interest \u2013 most notably General Motors.<\/p>\n

\u201cWhy should (GM) bail out FCA?\u201d a top General Motors executive told Automotive News. Officials have discounted such a deal in conversations with TheDetroitBureau.com, as well.<\/p>\n

That apparently hasn\u2019t dissuaded Marchionne or the Fiat Chrysler board.<\/p>\n

“I’ve offered to sit down with them and take them through the numbers,” he said, adding that GM “may reject the deal but (they) can’t reject the discussion. If you’re refusing to talk to me, and you have seen nothing, you either think you’re above it all, or you think the capital markets are full of schmucks that owe you something.”<\/p>\n

(Blast from the past. <\/em>Click Here<\/span><\/a>to see how Detroit makers are reviving old nameplates.)<\/em><\/strong><\/p>\n

This isn\u2019t the first time a proposed alliance between General Motors and what was then Chrysler Corp. has come up. Prior to the bankruptcies of those two makers in 2009, former GM CEO Rick Wagoner had proposed buying his cross-town rival. It was widely believed that the bigger maker would then shut down most of Chrysler, perhaps keeping only a few key assets, such as Jeep, going.<\/p>\n

Few observers saw much of an upside, however, and with GM rapidly running out of cash, the proposal was scrapped. As the two automakers filed for Chapter 11, the Obama Administration quickly came up with cash to rescue General Motors. But the president hesitated about bailing out Chrysler until Italy\u2019s Fiat came along, assuming control.<\/p>\n

Marchionne has since said that trans-Atlantic alliance isn\u2019t efficient enough, and has gone looking for another partner. While no one has yet been named, he insists he has several options, but appears fixated on a deal with GM.<\/p>\n

Analyst Max Warburton, of Sanford C. Bernstein, issued an investors note in June warning that such a partnership could become \u201can operational and management nightmare,\u201d but he also suggested that, \u201cfrankly if anyone can smash through the issues and make it function, it would be Marchionne.”<\/p>\n

For his part, Marchionne admits such a merger would be difficult, but contends that when you look at the numbers, “An attack on GM, properly structured, properly financed, it cannot be refused. You can play hardball to a point. … It’s too big to ignore, which is the issue that our board is facing.”<\/p>\n

What happens next remains to be seen, but considering GM isn\u2019t even taking Marchionne\u2019s calls, he just may have to squeeze harder.<\/p>\n

(UAW workers asked to authorize strikes at both GM and Chrysler. <\/em>Click Here<\/span><\/a> for the story.)<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Fiat Chrysler Automobiles CEO Sergio Marchionne isn\u2019t one to readily take \u201cno\u201d for an answer, especially when General Motors is rejecting his proposed partnership. The FCA boss says he may “really hug” his rival until its ready to talk about a deal, reports TheDetroitBureau.com.<\/p>\n","protected":false},"author":2,"featured_media":96471,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/98084"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=98084"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/98084\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/96471"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=98084"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=98084"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=98084"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=98084"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=98084"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=98084"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}