Why is Sergio insisting on a GM deal?

Lots of people think they know why Sergio Marchionne, head of Fiat Chrysler, wants to join with General Motors. But the arguments I’ve heard are all rational: lower costs, capital problems, etc.

I have a theory, based on my own experience as an editor.

He hates to see a company badly run.

fca+GM+SMI am not blaming Mary Barra. GM has been run into the ground for decades, and the culture apparently remains complacent. What GM needs is not a capable manager/engineer now; it needs a crazy workaholic who can get things done even if it means littering the landscape with ex-executives. (Come to think of it, he’d be a useful President if he wasn’t a Canadian.)

I think Sergio Marchionne looks at GM and thinks about the ways he can make it better, and he just can’t resist trying to gain control of it.

He can rationalize that desire. Here are some of the rational excuses:

  • The usual merger excuses: economies of scale, cost reduction, etc. (He did say no manufacturing jobs would be lost. I suspect no engineering jobs would leave, either. HR, IT, etc… probably.)
  • There isn’t really much overlap in brands. Chrysler and Buick are sort of similar but Chrysler seems to actually be more successful these days. It’s somewhere between Chevrolet and Buick. Dodge fits a Pontiac-size hole at GM. Cadillac is more of an Alfa Romeo competitor but not quite where Alfa wants to be. (The biggest problems are probably Caddy/Alfa and Buick/Chrysler). Buick is mainly a China brand now, and dropping it in the US would not hurt the company. GMC, the upscale truck brand, could stay as is, and Ram and Chevrolet pickups could be differentiated in styling, tuning, and perhaps engineering approaches while sharing most parts and the basic design. There is no GM equivalent for Jeep.
  • The two companies have different geographical footprints and in Europe don’t seem to compete head-on.
  • GM has lots of technologies FCA could use, including electric cars, old hybrid patents, the ten speed automatic to be shared with Ford, direct injection, etc. FCA also has lots of technologies, including advanced diesel, electric cars, their own direct injection, and more experience with advanced turbocharging and supercharging.

Mainly, though, GM is begging for someone who can run the place.