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Fiat Chrysler CEO approached GM about a merger, was rebuffed: NYT

John Elkkan,   fiat-chrysler

The New York Times reported on Saturday that Fiat Chrysler Automobiles CEO, Sergio Marchionne, who leads the world’s seventh-largest carmaker, sent an email to General Motors Chief Executive Mary Barra in March, suggesting combining the automakers but was rebuffed.

Fiat Chrysler has high debt level and barely breaks even in Europe. Analysts say it is expected to burn cash for years to revamp its neglected Alfa Romeo brand.

Two people with knowledge of the email, the Times said, 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.

On April 13 Reuters was first to report that Marchionne, 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 idea of a merger did not interest Barra or any other G.M. Executives, The New York Times said

“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.

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 Inc during a recent trip to California but declined to elaborate.

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