How GM and FCA could come together

Mergers of any kind are difficult to execute, even when both parties are willing to do the deal.

Arndt Ellinghorst, head of global automotive research at Evercore ISI in London and one of Europe's most influential auto analysts, handicaps the scenarios around a possible General Motors merger with Fiat Chrysler Automobiles.

• Friendly merger: GM agrees to merge operations with FCA, or it purchases FCA outright to take control of the company. Ellinghorst says GM has enough cash to make it happen, but the likelihood is near impossible. "GM has already declared it's not interested in FCA," Ellinghorst said.

• Hostile/forced merger: In what also is known as a transactional deal, FCA would need to gain influence on the GM board and convince board members to execute a merger based on pressure. Earlier this year, GM agreed to a share buyback when board member Harry Wilson applied pressure to GM management. "Maybe with the share price low, this could be a successful attempt," Ellinghorst said.
• FCA buys GM: With GM's market cap at $45 billion, FCA would need support from an outside investor to raise enough cash to make the transaction happen. However, Ellinghorst said an announcement of a purchase would spark "a price rally like hell" in the stock market, effectively pricing FCA out of a deal.

Ellinghorst said cooperation from the unions combined with "rational arguments with one or two like-minded people on the board" could influence a discussion and increase pressure on GM's management.

"If it's an ongoing theme that keeps getting discussed, at one point it can't go away," he said.