The New York Times on Saturday, reported that General Motors Co. (NASDAQ:GM) CEO Mary Barra rebuffed Fiat Chrysler Automobiles (NASDAQ:FCAU) Chief Executive Sergio Marchionne offer for merger in March. In April, Marchionne was expecting a super merger in the U.S, to fix the company’s weakness and highlight his legacy before retiring in early 2019.
Two unnamed sources with the knowledge of the email mentioned that how global automakers needed to cut down cost and save money through a merger between GM and Chrysler. The merger would have helped in cutting billions of dollars, and would have created an automotive giant. The email detailing the merger did not interest Barra or any GM executives.
“Instead, Machionne’s request for a meeting on the subject was flatly turned down,” reported the times, citing unnamed sources.
Marchionne had made a public plea in late April for shrinking down the number of players in the automotive industry as his company reported lower-than-expected first-quarter results. On May 4, Barra stated that they had not held talks with Marchionne, and GM would continue to invest in product development. On April 29, Marchionne indicated that he would approach Silicon Valley companies like Apple Inc or Google Inc as they are looking for an entry into the traditional car market.
Though Marchionne stated that he met Tesla Motors Inc and Apple Inc. on May 9 in California, he did not reveal the details. Morgan Stanley analyst Adam Jonas wrote in a research note to investors that automakers rarely seek merger until times are desperate. However, analysts predict that Google or Apple might approach the company to manufacture cars on a contract basis. Fiat Crysler is facing a tough time with rising debt levels with a similar situation in Europe. It is also set to invest in revamping the Alfa Romeo brand, and might fail to find a partner.[ Via ]