General Motors' chief executive has rejected calls for a merger of the world's third-largest carmaker by sales with its rival Fiat Chrysler Automobiles.
In a rebuff to Fiat Chrysler boss Sergio Marchionne, Mary Barra told the annual gathering of GM shareholders the company had received a letter from the management of Fiat Chrysler Automobiles. The approach suggested that the two companies meet to discuss a potential deal to create a new number one in the industry.
“We did receive a letter . . . that was thoroughly vetted by management and the board, and a decision was made. We have scale. If you look at our track record, we’ve had for the last four years margin improvement and we’re showing steady improvement on our goals to 2016 and then returning all available free cash flow to shareholders,” she said.
Mr Marchionne issued a plea six weeks ago for consolidation in the car industry, saying carmakers needed to bring down the costs of producing electric cars and self-driving technology.
But sceptics say Fiat Chrysler, which has relatively weak operating margins and is carrying a high level of debt, needs GM – which owns the Opel car brand among others – more than vice versa. “We think we’re acting in the best interest of the GM shareholders,” Ms Barra said.
Mr Marchionne said at the weekend that he preferred to deal directly with management and board members. However, having been rebuffed in his early attempts to engage GM’s executive team, he is understood to be trying to bring shareholders around to his way of thinking. – (Copyright The Financial Times Limited 2015)