Mary Barra is facing
her first real test as chief executive officer of General Motors.
At present she has firmly rejected any idea
that GM would benefit from such a link-up with FCA.
“Adding a partner is not necessary for one of
the world’s biggest auto companies,” she said. “We have scale and we are
leveraging that scale. For the last couple of years we have been merging with
ourselves.”
She says that GM has “no interest” in pursuing
a deal with FCA, despite a personal appeal by an email from the company’s Italian
supremo.
Quite who would benefit from the merger is not
spelled out, but one imagines that Marchionne sees himself as the leader of the
new group with Barra as second in command.
Barra says GM’s plan is "to remain firmly
committed to building brands, increasing market share and maintaining its
international operations”.
And so, at just the point that GM is beginning
to regain momentum in the marketplace, its long-term prospects have been thrown
into doubt as Marchionne throws an Italian-shaped spanner into the works.
Marchionne sees a combination of the two
companies “would save billions of dollars in costs and provide better return
for shareholders”.
Quite which of the two companies would benefit
most for the “combination” is difficult to see but since Marchionne is the
advocate of the proposal seemingly he would not be suggesting it unless FCA
came out on top in terms of cost savings and improved profitability.
The “combination” of FCA and GM could see
benefits coming in the form of component sharing, greater plant utilisation,
improved purchasing, pooled R&D and a reduced headcount as under-utilised plants are
shuttered.
Having seemingly having mastered the link-up
of Fiat Auto and Chrysler (a company that Daimler AG either failed to come to
terms with in terms of understanding the business mode; or, having looked
closely at the business, recognised it would not be a suitable business match
for the German car, bus and truck maker) Marchionne seems keen to march on and
form a tripartite global automotive business.
But Barra, for the moment, remains focused on “the
plan”.
“GM will sell 10 million vehicles worldwide
this year and does not need a partner to improve profits and become more
efficient,” she has said.
However, it is that golden spectre of 10
million vehicles that no doubt is proving so alluring to Marchionne who, looking
at the figures, no doubt has thoughts how he could increase the profits for the
combined group, especially the FCA part of the “combination”.
Time will tell if Mary Barra is right, and
Marchionne has mistimed his attempts at courtship. Incidently, GM's media website makes no mention of the company receiving an approach from Marchionne.
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