GM Won't Merge With Fiat Chrysler, CEO Barra Says
DETROIT (WWJ) - General Motors CEO Mary Barra says neither she nor the company's board of directors is interested in a merger with Fiat Chrysler.
"Over the last couple of years, we've really been merging with ourselves," said Barra, before the company's annual meeting of shareholders. "I think we're seeing the benefits of that."
For the first time, Barra confirmed earlier reports that she had been contacted about a merger by Fiat-Chrysler CEO Sergio Marchionne.
"There was an email that was very much vetted with management and our board," said Barra. "After we reviewed that, we are committed to our plan, and think that's in the best interest of General Motors shareholders, and we have strong support."
Marchionne--who has been seeking partners in the auto and tech industries--feels that a tie up could create greater scale, but Barra says that's not an issue with GM.
"We're gonna sell ten million vehicles this year across the globe. We have scale. We're leveraging that. We're very smart about it," Barry said.
Analysts have also been cool to the idea of a Fiat-Chrysler GM tie-up.
"A GM-FCA merger doesn't seem like the most effective use of either company's assets," said Kelley Blue Book's Karl Brauer. "Both companies have a strong lineup of trucks and SUVs, which are their largest drivers of sales and profit. Furthermore, GM already has an advantage over FCA in terms of successful small cars and hybrid vehicles."
The company's ignition switch controversy isn't casting the same shadow over this year's meeting, as it did over last year's session. But there are reports that the government is considering wire fraud charges against GM.
That would be similar to a $1.2 billion dollar deal reached by Toyota with the government over its unintended acceleration problems.
"We have cooperated fully," said Barra. "We continue to do that. It is their timeline. We are going to continue to cooperate to the fullest extent we can. Beyond that, I think anything else is pure speculation and it does no one any good."
Barra did confirm that she has spoken to federal investigators.
In her talk to shareholders, Barra portrayed General Motors as a company that is seeing improvements in sales, financial results and other areas.
"The bar for success is high and getting higher."
The next major issue for General Motors is this year's contract talks with the United Auto Workers Union, which see a number of major issues brewing ranging from the workers desire for a pay raise, to a possible elimination and modification of the controversial two-tier wage scale.
Barra said it's best that specifics be discussed in private. But, she said the goal is to get an agreement without a work stoppage.
Official contract talks begin later this summer, but Barra says the dialogue with the union is ongoing.
"We are regularly working on what are our challenges and problems, and listening to each other so we understand and can do creative problem solving."
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