GM resists Fiat’s call for a merger

GENERAL Motors (GM) chief executive Mary Barra said yesterday that the US car maker would continue to resist Fiat Chrysler Automobiles chief executive Sergio Marchionne’s call to combine with his company because all signs pointed to independence as helping investors the most.

“We have studied that issue in great detail, both with internal resources and external experts, and it’s not in the best interest of General Motors’ shareholders” to merge with Fiat Chrysler, Barra said at the Frankfurt International Motor Show. GM has the scale needed to achieve the “best return possible to our shareholders”.

Marchionne has been crusading for consolidation in the auto industry, including in an April presentation called “Confessions of a Capital Junkie”.

He argues that car makers waste money by developing multiple versions of the same technology and so should merge. He has largely narrowed his focus to GM as a potential target because it shares a multibrand strategy with London-based Fiat Chrysler, which was created in 2014 from the merger of Italian car maker Fiat and US counterpart Chrysler. In addition, GM does not have family shareholders to defend it like Ford Motor.

Barra, who said she had never met Marchionne to discuss a deal, is at the Frankfurt show to help GM’s Opel division in Europe introduce the new version of its Astra sedan, which already has 30 000 orders.

The brand and its UK sister nameplate, Vauxhall, plan to bring out 29 models to reach an 8 percent market share in Europe. That compares with the 6.7 percent that the GM units posted for the first eight months of the year, according to industry figures.

Marchionne cancelled plans to attend the Frankfurt trade fair because he is staying in Detroit for contract talks with the United Auto Workers union. – Bloomberg