The CEO of Fiat Chrysler, Sergio Matchionne, is making another move to merge with popular American auto company General Motors (GM). He is very keen on trying to merge the two auto giants in order to generate more earnings. He claims that a merger with General Motors will be profitable for both the companies as it could generate close to $30 billion in earning every year before the taxes.
This move in not a new one as the merger between General Motors and Fiat Chrysler has been tried before as well, but did not succeed. Now, the Fiat Chrysler CEO is once again keen on renewing the talks to forge a merger between the two auto companies. Marchionne had earlier in the year sent an email to the GM CEO Mary Barra projecting his idea of a merger between the two companies and why it is a profitable one. But, Barra has openly said that GM is not interested in putting this idea into practice.
Barra said that GM has a scale set up and the company is slowly but surely moving towards the scale. The company has been trying to merge with itself for the past several years and there is no question of merger with another auto company.
Even Marchionne was seen to be a bit low with his idea during the midsummer. But, now out of nowhere, he has again taken an aggressive tone and started to talk about a merger of General Motors and Fiat Chrysler.
Marchionne said that the combined unit can make up to $30 billion in cash a year, which is a huge sum. If the environment is feasible, then the merger can generate $28 to $30 billion every year without much effort.
The annual selling will be close to 17 million new cars and trucks across the US. Both companies will be able to make cost savings which they cannot ignore. Hence, Marchionne is looking at striking a good deal with General Motors and the board members and executives of General Motors would really consider his appeal, if they are looking at cost savings.
General Motors has announced that it has gone through the proposal laid forth by Fiat Chrysler CEO. The management and the board of GM are very keen on maximizing the shareholder value. They have gone through the proposal from Fiat Chrysler and have reviewed it completely. They have come out with a decision to stick to their current plan to generate good value for their stockholders. At the moment, the proposal from Fiat Chrysler CEO is kept in cold storage by GM.