Though FCA CEO Sergio Marchionne is still looking to merge his company with another automaker, no one is all that willing to tie the knot.
Despite Marchionne’s quest to consolidate the industry by leading by example, he’s managed to strike out in some way with Ford, General Motors, Peugeot, Renault-Nissan and Volkswagen.
Regarding GM, CEO Mary Barra stated Thursday that her company already had plans of its own and that it wasn’t interested in consolidation with another automaker, according to Detroit Free Press:
We laid out a comprehensive plan that takes us through the early part of next decade. We’re already in that top tier. We have a well-articulated plan and we are not going to entertain anything that would distract us from achieving that plan.
Meanwhile, a proposed tie-up with Volkswagen came to naught, though Marchionne stated such a thing was never in the cards in the first place, despite claims by VW Group chairman Ferdinand Piëch of having met with FCA officials to discuss buying a part or all of FCA.
Though there are still other smaller automakers Marchionne could pursue in the spirit of consolidation, like Mazda and Tata, there’s the issue of his own company’s performance as of late. Already stuck with large debts, Forbes states profitability is a major issue among shareholders regarding the automaker. In the U.S. alone, the issue stems from its pursuit of sales volume over profit via aggressive incentivizing. As a result, margins remain at 4 percent and pre-tax earnings have climbed a mere $2.7 billion, even with revenues doubling by $40 billion since the start of the new decade. Thus, no company would likely consider consolidating with FCA.
As for why Marchionne is banging the drum of consolidation, especially as far as his company is concerned, it comes down to survival in the face of competition from outsiders like Google and Apple. The arrival of non-traditional companies like the two tech giants could force automakers to keep up with the pace of change such companies would set the further the latter group digs into the former.
For now, though, the FCA CEO laments the difficulty in finding a partner, going as far as to provide Bloomberg with a metaphor about the search earlier this month:
One of the most difficult things to do is to get the turkey to invite himself to Thanksgiving dinner.
[Photo credit: FCA]
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