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GM's Barra brushes off Fiat merger talk
[DETROIT] General Motors chief executive Mary Barra brushed off talk of a merger with Fiat Chrysler Automobiles on Tuesday, suggesting the top US automaker doesn't need to boost its size via acquisition.
"We have scale. We're in the top tier," she said to questions about overtures from FCA head Sergio Marchionne.
"The best way to boost the value of GM's shares is follow the company's own its internal plan for improvement." Ms Barra confirmed that the company had received an email from Marchionne proposing talks about a possible tieup.
"That was very much vetted with our management and our board," she said.
But the company, which expects to sell more than 10 million cars and trucks worldwide this year, says it can do well enough on its own strategy for growth.
"We've got a plan. We've demonstrated strong margin growth. We're investing in technology. We're generating industry-leading returns on invested capital. We've got scale and we're leveraging that scale," Ms Barra said.
"We want to do what's right for our shareholders. That's our focus." Last month, Marchionne, who engineered the combination of Fiat and Chrysler, said he expects more consolidation in the auto industry, but did not confirm at the time that he proposed talks with GM.
The Wall Street Journal reported Tuesday that Marchionne is now trying to enlist hedge funds to help put more pressure on GM to consider combining with FCA, which produced 4.6 million vehicles last year.
Ms Barra did not say directly that talks with any rival were out of the question.
And she said the company was open to "partnerships" with other automakers, such as cooperation with Ford to develop new transmissions, and with Honda on fuel cells.
But she repeated that GM has "had a merger with ourselves in the past couple of years," pointing to the major reorganization of the company's engineering staff after GM was forced to recall more than 42 million vehicles at a cost of US$3 billion.
"When you look at what we went through last year, we are a much better company for it," Ms Barra added, referring to the scandal around faulty ignition switches, which are blamed for the death of at least 107 motorists.
GM is under federal investigation over why it only acted last year to recall cars over the ignitions, even though it knew about the problem for more than a decade.
The Wall Street Journal also reported Tuesday that the company could face criminal wire-fraud charges in the case, and Justice Department prosecutors are looking to negotiate a settlement to avoid a trial.
Ms Barra would not comment on the report, but said that the company is cooperating with officials in the case.