It might sound crazy, but Fiat Chrysler and either GM or Ford could merge
Matthew DeBord
Mar. 12, 2015, 5:26 PM
FCA CEO Sergio Marchionne.
Bill Pugliano/Getty Images
Fiat Chrysler Automobiles CEO Sergio Marchionne is no stranger to bold statements. But his most recent comment sets a new standard.
According to Bloomberg's Tommaso Ebhardt, Marchionne said that FCA "is open to a combination with General Motors Co. or Ford Motor Co."
Ebhardt reported that Marchionne said a merger was "technically feasible." The advantage would be in sharing development costs, Marchionne argued.
Ebhardt also reported that GM and Ford don't have much to say at this point about the idea.
Marchionne's position actually makes this sound more like a partnership that a full-on merger, something that's already familiar to auto industry executives. Car companies like to spread development costs around, then separately take advantage of new technological developments.
In any case, Marchionne has a history of insisting that a carmaker can't survive in the current global competitive environment unless it achieves significant scale. That's why he jumped at the chance to take over Chrysler in the aftermath of the financial crisis, when the Detroit car maker went bankrupt.
Chrysler has been doing well of late, particularly with its Jeep brand. The company has benefitted from a major recovery in the US auto market over the past two years.
FCA has also announced plans to spin off Ferrari in an IPO, to raise billions to fund the company's growth plans.
The bottom line is that a merger with GM or Ford wouldn't necessarily make a whole lof of sense for FCA. There would, for example, be a lot of duplication of vehicles, especially big trucks and SUVs, two product categories that are currently selling a good clip.
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