General Motors CEO resists merger with Fiat Chrysler
The CEO of Fiat Chrysler sent an email about a possible merger, according to General Motor Co.'s CEO Mary Barra, who answered questions prior to the company's annual meeting.
General Motors Co. Chief Executive Officer Mary Barra said on Tuesday that Fiat Chrysler Automobiles NV CEO Sergio Marchionne sent an email proposing a potential merger, and that GM's board gave "strong support" to her strategy of going it alone.
Marchionne has been conducting a campaign to persuade rivals and investors that the auto industry needs another round of consolidation.
Marchionne's proposal was "very much vetted with management and our board, and after we reviewed that we are committed to our plan and we have strong support," Barra said during a briefing for media ahead of the automaker's annual meeting.
In comments late last month, Marchionne and FCA Chairman John Elkann said they had reached out to rivals, particularly GM.
Marchionne is reaching out to hedge funds and activist investors to help persuade General Motors Co to agree to a merger, the Wall Street Journal reported on Monday, citing people familiar with the matter.
Marchionne has said automakers should collaborate to achieve greater economies of scale as they develop new vehicles and technologies required to comply with tougher emissions mandates in the major global vehicle markets.
Elkann, responding to a question about whether FCA would consider a hostile bid for GM, said the company would "act with determination if there are the prerequisites to do something that makes sense," without giving any details. [ID: nL5N0YK320]
Barra, in her remarks, didn't respond directly to the overtures from FCA, but made it clear she's not interested in a combination.
"We are merging with ourselves," Barra said, a reference to years of effort by GM executives to consolidate overlapping, duplicative engines, transmissions and vehicles in the company's global model lineup.
"We're focused on our plan," Barra said. "We have scale. We have leveraged the approproiate opportunties."
On a separate issue, Barra said GM has "cooperated fully" with a U.S. Department of Justice investigation of the company's more than decade of delay in recalling vehicles equipped with defective ignition switches. The switches could slip out of the run position inadvertently, cutting power to airbags, steering and other systems. A compensation fund set up by GM has made payments in connection with 111 deaths linked to the defects.
Barra didn't comment in detail on a report Tuesday by the Wall Street Journal that the Justice Department is considering wire fraud charges against GM. Any settlement of the case would be on the Justice Department's timeline, Barra said.
"Anything beyond that is pure speculation and does no none any good," Barra said.
(Reporting by Joe White; Editing by Jeffrey Benkoe)