Marchionne approached GM about a merger, but was rebuffed, NYT reports

Marchionne: “I've always had this incredible sense of urgency." Photo credit: Bloomberg

DETROIT (Reuters) -- As part of his quest for a mega merger, Fiat Chrysler Automobiles Chief Executive Sergio Marchionne sent an email to General Motors CEO Mary Barra in March suggesting combining the automakers but was rebuffed, the New York Times reported on Saturday.

Quoting two people with knowledge of the email, the Times said it detailed how global carmakers needed to consolidate to save money and suggested a merged GM and Fiat Chrysler would cut billions of dollars in costs and create an automotive giant.

The revelation was no surprise given that Marchionne has been aggressive and public in his ongoing quest to get the auto industry to consolidate. 

Reuters first reported on April 13 that Marchionne, who leads the world's seventh-largest carmaker, was contemplating a super merger, possibly in the United States, to plug his company's weaknesses and cement his legacy before stepping down in early 2019.

The New York Times said the idea of a merger did not interest Barra or any other GM executives.

"Instead, Mr. Marchionne's request for a meeting on the subject was flatly turned down," the Times reported, citing people with knowledge of the situation who spoke on condition of anonymity.

At the end of April, Marchionne publicly made a plea for shrinking the number of players in the global auto industry as his company reported lower-than-expected first-quarter results.

“I’ve always had this incredible sense of urgency,” Marchionne said in an interview with the Times. “I’ve always had this desire not to let things fester and to really seize the moment, because it’s serendipity.”

He added: "You create the conditions for it, and it just keeps producing outcomes or opportunities for you to pick ... And if you don’t pick them, then it’s your own damn fault."

Already said 'no'

Barra said on May 4 she had not held talks with Marchionne and that GM would continue to follow its own plan regarding investing in product development.

During his presentation on April 29, Marchionne said that if traditional automakers ignored his call, he might discuss a deal with Silicon Valley companies, including Google Inc. or Apple Inc., that are looking at ways to offer alternatives to traditional cars or car ownership.

Marchionne said on May 9 while in Canada that he had met with the heads of Tesla Motors Inc. and Apple during a recent trip to California but declined to elaborate.

Analysts have speculated Google or Apple could turn to an existing automaker or supplier to assemble vehicles as a contractor.

FCA has one of the highest debt levels in the industry and barely breaks even in Europe. Analysts say it is expected to burn cash for years to revamp its neglected Alfa Romeo brand, and may struggle to find a partner.

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