The People’s Chrysler: Volkswagen Open to a Merger with FCA

By Clifford Atiyeh

FCA-VW-merger

General Motors’ Mary Barra may choose to ignore Sergio Marchionne’s emails, but Volkswagen chief executive Matthias Müller is at least checking his spam folder in case the outspoken Italian sends a proposal to merge Fiat Chrysler and Volkswagen.

The VW CEO told reporters during the company’s annual investor conference that he is “not ruling out a conversation” with FCA CEO Marchionne to discuss a merger between the two automakers, Reuters reported. Weeks earlier, Müller (pictured below) had publicly denied any interest in speaking with Marchionne, saying, “We have other problems.”

Matthias Mueller, Chairman of German automaker Volkswagen AG, arrives for the company's annual press conference to present its financial results for 2016 on March 14, 2017 in Wolfsburg, Germany. The company has mostly settled it legal disputes with authorities in the USA over its diesel emissions manipulations though it still faces a number of lawsuits and investigations in Europe where it sold a much larger number of affected cars.

The two automotive giants have winked at each other before. During the summer of 2014, rumors peaked that VW and FCA would merge their combined 20 car brands into a giant entity. Both companies denied any possibility, only to see Marchionne aggressively court General Motors beginning in March 2015 (through at least one direct email to CEO Barra, if not by other methods). At the end of the following month, Marchionne made an unusual public pitch to investors—and specifically, to any automaker executive willing to listen—to promote industry mergers and decry what he called “unacceptable” capital spending and the “pure economic waste” that occurs when competing automakers develop the same parts and technologies. He said FCA was not up for sale but was searching for a “partner,” a word he has continued to use, for instance while discontinuing the Dodge Dart and the Chrysler 200 for lack of, you guessed it, partners.

Despite taking the equivalent of a $6.7 billion charge for the diesel scandal, the VW Group was still highly profitable in 2016, raking in $5.7 billion after taxes. It lost $1.5 billion in 2015 when the scandal broke in September that year. FCA recorded a net profit after tax of $1.9 billion, or nearly five times its net profit, in 2015. No other discussions between the two automakers are known at this time.

…read more

See full article at : caranddriver

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge