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Marchionne Claims FCA-GM Merger Would Generate $30B Annual Profit

Motor Trend logo Motor Trend 8/31/2015 Erick Ayapana

Fiat Chrysler Automobiles CEO Sergio Marchionne is continuing his ambitious quest to merge his company with General Motors. In a recent interview with Automotive News, Marchionne had a number of bold claims and said “It would be unconscionable not to force a partner.”

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The main reason for his incessant attempts, of course, is all about the numbers. Rumors about Marchionne’s plans first surfaced earlier this year when he said automakers waste too much money developing the same technologies. He claimed a merger of FCA and GM would help cut the waste. MotorTrend Image© Provided by MotorTrend MotorTrend Image

Now, Marchionne says he’s done the math and is even more confident that a merger would result in “cataclysmic changes in performance” to the tune of $30 billion a year in profits. “Just think about that [expletive] number,” he told AN. Marchionne provided few details on how he arrived at that number, which doesn’t take into account interest, taxes, and other costs. For comparison, GM’s net profit in 2014 was $2.8 billion, while FCA posted a profit of $617 million.

Despite Marchionne’s advances, GM still appears to have no interest. Some GM officials simply believe the company is fine on its own, while others have expressed serious doubt about Marchionne’s intentions. “Why should [GM] bail out FCA?” a GM executive asked while speaking anonymously to AN. Meanwhile, GM CEO Mary Barra has reportedly acknowledged and turned down Marchionne’s previous request for a meeting. GM CEO Mary Barra© Provided by MotorTrend GM CEO Mary Barra

"You may reject the deal but you can't reject the discussion,” Marchionne said. “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."

Source: Automotive News, 2 (Subscription required)

Sergio Marchionne With NYSE© Provided by MotorTrend Sergio Marchionne With NYSE
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