Why talk of GM-FCA tie-up just won't die

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Thread: Why talk of GM-FCA tie-up just won't die

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    Why talk of GM-FCA tie-up just won't die

    Sorry for the inconvience if it's already posted. I saw this one from Automotive News.
    http://www.autonews.com/article/2015...-just-wont-die

    DETROIT -- Few auto industry pundits seem to be taking Sergio Marchionne's awkwardly public pursuit of a merger with General Motors very seriously.

    Executives at rival companies sniff privately that the Fiat Chrysler Automobiles CEO's industry-consolidation drumbeat signals desperation. GM CEO Mary Barra couldn't dismiss the idea quickly enough. Even the Wall Street analysts who say it's worth a look are doubtful that he can force GM to the table.

    And yet, there must be some reason why the idea keeps resurfacing.

    This is at least the third time in the past eight years that executives have kicked the tires on a GM-Chrysler combination. That recent history of flirtation, along with flush equity markets and Marchionne's track record of rare success on a major automotive merger, seem to be enough to keep the idea alive.

    With both companies stumbling toward bankruptcy in 2008 and 2009, GM execs were tantalized by an estimated $7 billion in annual cost savings from a Chrysler hookup, then-GM Vice Chairman Bob Lutz told Automotive News this month. (That's the same order of magnitude as the roughly $5 billion in synergies that Marchionne said would flow from FCA's combination with "another large OEM," according to a presentation he outlined in April.)
    GM and Chrysler have flirted with a merger before. In 2004, above, then-GM CEO Rick Wagoner and then-Chrysler Group CEO Dieter Zetsche announced a joint effort to develop a hybrid propulsion architecture.



    'All for it'

    GM also was interested in early 2007, when Daimler was looking to end its failed marriage with Chrysler. Lutz said that dalliance included discussions between then-GM CEO Rick Wagoner and Daimler AG CEO Dieter Zetsche. Joint committees examined everything from product planning and platform consolidation to potential plant closures, Lutz said.

    The idea was to meld the best of Chrysler and GM, from engineering and purchasing to the legal departments, Lutz said.

    "The operating people were all for it because we could see the savings," Lutz said. "We would pick up all that volume, but you wouldn't pick up all of the fixed costs."

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    Re: Why talk of GM-FCA tie-up just won't die

    I still think this is a very long shot, but the fact that people are still talking about it can only mean that there are a few that think it's a good idea. I know SM wants this deal, but can't help but think that forcing a marriage through capital markets will only serve to create hard feelings at the altar.
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    Re: Why talk of GM-FCA tie-up just won't die

    Well, obviously, Marchionne wants this tie in because he believes that he can organize the 'merger' in such a way that FCA consumes GM more than melds with it. If that wasn't the case then a Ford-FCA tie-in would make more sense as you would have noticeably less brand redundancy; the mainstream global brand (Ford in this case) that Marchionne has stated he really wants and even needs in the fold; and better diesel engine tech which wont be lost on any European brand of which FCA has several.

    So why no wining and dining at the Glass House for Marchionne? Because the Ford family will never allow anyone else to control that company by choice, and since they own the majority of the voting shares they get to choose so long as they stay solvent. Even if they didn't balk at a merger, they would balk at anything other than the Ford family calling the shots. Without question Marchionne is still thinking hostile takeover, and the fact that GM is potentially vulnerable to the same is eaily one half of the reason why he is looking at GM in the first place.

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    Re: Why talk of GM-FCA tie-up just won't die

    sure, if we can bury Chrysler, Dodge and Jeep in the anals of history. Bury them now.

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    Re: Why talk of GM-FCA tie-up just won't die

    M & A (Merger and Acquisition) in the Auto industry is inevitable in the next 5 to 10 years (most likely the former number) so FCA and GM are both going to be in some kind of "Merger, Alliance or Acquisition" so why not put the two that have the highest synergies together and the one that keeps FCA and GM's iconic brands with some kind of U.S. base.

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    Re: Why talk of GM-FCA tie-up just won't die

    Quote Originally Posted by SierraGS View Post
    M & A (Merger and Acquisition) in the Auto industry is inevitable in the next 5 to 10 years (most likely the former number) so FCA and GM are both going to be in some kind of "Merger, Alliance or Acquisition" so why not put the two that have the highest synergies together and the one that keeps FCA and GM's iconic brands with some kind of U.S. base.
    That is not necessarily the case, and if anything, GM , Toyota and Volkswagen are going to probably remain unmergerble, neither is Hyundai.


    Probably the French companies are the ones that would love a partner. But Gnosh and Marchione are birds of a feather, they would end up killing each other.

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    Re: Why talk of GM-FCA tie-up just won't die

    If there's a "merger" between GM and FCA, I'll be hanging out at FIN!

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    Re: Why talk of GM-FCA tie-up just won't die

    Quote Originally Posted by Ambalanche View Post
    If there's a "merger" between GM and FCA, I'll be hanging out at FIN!
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    Re: Why talk of GM-FCA tie-up just won't die

    Sergio is underestimating Maria Barrah. He figures she is a weak female.

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    Re: Why talk of GM-FCA tie-up just won't die

    Quote Originally Posted by regfootball View Post
    sure, if we can bury Chrysler, Dodge and Jeep in the anals of history. Bury them now.
    Heh. I believe you meant "annals". Quite a difference a single "n" makes.

    Sorry for being pedantic, but this one was funny. :-)

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    Re: Why talk of GM-FCA tie-up just won't die

    Quote Originally Posted by mbukukanyau View Post
    Probably the French companies are the ones that would love a partner.
    Umm......something called "Government of France" (Largest Shareholder) feels otherwise.

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    Re: Why talk of GM-FCA tie-up just won't die

    A bit more on the table, this editorial on Allpar. http://allparnews.com/index.php/2015...rt-sales-29099

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