Despite rumors circulating for months, General Motors is apparently not interested in a merger with Fiat Chrysler. GM CEO Mary Barra did not mince words in her reply to a question in a Q&A session ahead of the company’s 2015 shareholder meeting in Detroit on Monday. Barra said such a mega-merger it would not save much money through scale and would throw a wrench in the company’s ongoing efforts to improve its operations.
Statement from GM CEO Barra
“We have scale, and we have leveraged the opportunities where we could benefit from partnerships,” Barra explained while answering a question about a possible merger with Fiat Chrysler.
In her answer, Barra did admit that General Motors had been approached by FCA regarding a merger through an email, which she said “was fully vetted,” but ultimately rejected by GM’s board of directors.
More on possible GM – Fiat Chrysler merger
Sergio Marchionne, the CEO of Fiat Chrysler, was behind the approach to GM, and sources say he continues to push for a deal between the two firms, arguing that the auto industry needs to consolidate.
Of note, Marchionne is known to have approached a number of activist investors to try and force some kind of a tie-up between the two firms to extract more value out of GM.
Analysts point out that the pressure in on CEO Barra, as the auto giant’s share price has been stuck at the same level since November 2010 when the company went public after its (kind of) bankruptcy in 2009.
Possible federal criminal charges on ignition switch recall
A report in the Wall Street Journal also notes that the iconic auto maker could be looking at wire-fraud charges from federal law enforcement authorities for related to the firm’s belated ignition-switch recall, which has been linked to over 100 deaths.
Barra would not discuss the possibility of criminal charges in the Tuesday Q&A, and would only say the firm was cooperating fully with the authorities. She did mention she had a meeting with Justice Department representatives back in 2014.