Now that General Motors is potentially selling off its European brand Opel to PSA, there is one way the automaker could stay in Europe and remain profitable: by finally taking up FCA CEO Sergio Marchionne's offer to merge.
FCA has been actively wooing a potential merger partner for more than two years, including a failed 2015 bid to hook up with rival GM, which Marchionne argued at the time would result in "cataclysmic changes" in terms of increased profit margins.
FCA's advances were met, and continue to be met, with a cold shoulder from GM. In fact, with its sale of Opel, GM looks ready to leave Europe -- where it has lost $8 billion since 2009 -- in the rearview mirror.
But FCA does something in Europe that Opel does not: It makes money. And it also has another potentially luring asset: Jeep, which has become a global powerhouse in recent years.
For 2016, FCA reported 327 million euros ($346 million) in positive adjusted EBIT from its Europe/ Middle East/Africa region, with increased sales, market share and net revenues.
Since being spurned by GM, FCA has steadily worked to right its balance sheet and transform itself into a more appealing potential mate. The company had cut its net debt by the end of 2016 to 4.59 billion euros ($4.87 billion). FCA also eliminated the unprofitable production of compact and midsize sedans in the U.S. to boost production of more profitable Jeep crossovers and SUVs and Ram pickups.
An FCA merger would allow GM to maintain a presence in Europe and give it an active dealer network there, as well as give it access to more profit-rich brands such as Maserati, which boasted a 9.7 percent adjusted EBIT margin globally in 2016.
A deeper-pocketed GM also could choose to continue the resurrection of Alfa Romeo, or sell it off. Volkswagen Group has continually expressed interest in acquiring Alfa Romeo.
Buying FCA would give GM access to Jeep, and rectify what some view as a monumental error when it killed the Hummer brand in 2010.
Under FCA, Jeep has become a global presence again for the first time since World War II -- and one that now features a much larger brand lineup. Once largely confined to North America, Jeeps are now built and sold in South America, Asia and Europe, and could be exploited further under GM.
A merger or acquisition of FCA would springboard GM far ahead of the now larger Volkswagen Group and Toyota Motor Corp. in terms of global sales and let the Detroit automaker reclaim its past glory as the world's largest automaker.
But at home in the U.S., the results would likely be economically devastating.
A combination of GM and FCA would likely result in large manufacturing job losses, the elimination of at least the Chrysler and Dodge brands, and hundreds -- if not thousands -- of dealer consolidations or closings across the continent.