Fiat Chrysler CEO Sees Consolidation Urgency in Car IndustryTommaso Ebhardt
Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne intensified his call for an automotive mega-merger.
Consolidation needs to happen soon as the industry pours 2 billion euros ($2.2 billion) a week into developing new cars, Marchionne said in an interview Saturday at The Council for the U.S. and Italy. Potential partners including General Motors Co. have previously snubbed his advances.
“Intelligent people would agree that a remediation of that waste is useful,” Marchionne said, clad in one of his trademark sweaters on a steamy 30 degree Celsius (86 degrees Fahrenheit) day at the Venetian Lagoon. “The faster you do it, the better it is.”
Marchionne is pushing the auto industry to consolidate in order to share the cost of developing new technologies such as increasingly autonomous cars and more efficient engines. His pleas have fallen on deaf ears at other manufacturers, as rosy U.S. and European sales numbers leave carmakers feeling less pressure to restructure. Both GM and Ford Motor Co. have indicated they’re not interested.
The outspoken CEO, who uses four iPhones, including one with a Ferrari cover, appealed directly to investors after meeting skepticism from executives. He cited the 2 billion-euro weekly figure for development costs in an April 29 presentation for analysts called “Confessions of a Capital Junkie.”
He said on Saturday he’d still prefer to discuss a deal at the board level.
Marchionne’s search for a partner comes amid a push to boost Fiat Chrysler deliveries by more than half to 7 million cars in 2018. To finance that target, Marchionne plans to sell a 10 percent stake in Fiat’s Ferrari unit this year and distribute Fiat Chrysler’s remaining 80 percent holding in the sports-car maker to current investors at the beginning of 2016. Originally planned for the end of June, the Ferrari initial public offering now won’t happen before mid-October because of a tax ruling, Marchionne said on Friday. The delay isn’t linked to merger talks, Marchionne said.
If Fiat Chrysler does find a willing partner, he said he’d consider remaining as CEO past his announced 2018 departure date.
The shares rose as much as 1.7 percent, trading up 1.4 percent to 14.12 euros at 9:25 a.m. in Milan. Fiat Chrysler has gained 46 percent this year, compared with a 27 percent return including reinvested dividends for the Euro Stoxx Automobiles and Parts Index.
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