Both GM And FCA Exploring Dynamics Of Merger - Is This A Good Thing Or A Colossal Mistake?

First, it's a necessity, and a matter of survival for a company that isn't doing well. DO you think BMW is seeking a merger? Hell no! They're doing just fine (FYI, they have a habit of being profitable, even in dire economies).

What's sad is that these giants are once again marching to the drum of financial challenges and uncertainty about their long-term viability. I don't know how many times we need to repeat this cycle before we have massive public sentiment than we should just cut the free and let them learn to sink or swim. My personal *guess* is that as long as we have a sufficiently high number of voters who don't know or remember these guys' patchy history, and/or who want to save their own job in the auto industry, then we'll keep doing the bailout dance.

I predict the merger agreement will happen by Christmas. I also predict another bankruptcy and the shedding of brands (Chrysler, Ram, Dodge, Lancia).

If I were Mary Barra, I'd be looking for a merger with someone like Toyota or VW to rebuff Sergio. LOL

Sorry Fiat - but one cannot make a legitimate Business case for "merging" with GM. There are simply no real advantages for GM to do so. With The exception of Jeep - and even in that case it is marginal - GM has no need for the product lines that FCA has. Neither Chrysler nor Dodge would be needed - they just got rid of Olds and Pontiac and Saturn and Hummer - among others. There are few areas - largely old Iron Curtain countries- that Fiat operates in the do not have GMs' OPEL.

Gm already has class leading Transmissions technology - and does not need to pay their major competitor(ZF) for any. The Pentastar V-6 is now at least a generation behind the times - and GM has its own series of V-6 engines - as well as 4 cylinder and smaller. Ferrari is already not part of the deal - but they really need to be left alone. And GM has already spent the money on updated and new platforms - CUV platforms - FWD and RWD platforms. Gm has already made a deal with Isuzu for Mid Size Trucks. I just don't see the synergy existing to be worth the effort.

Ferrari is still very much a part of FCA and therefore on the table not off. The spinning off of Ferrari was postponed until October or beyond.

I'm beginning to think this is a strategy to scare the UAW. FCA is up first in contract negotiations. Marchionne is running around acting like the sky is falling at FCA. The merger with GM would axe Dodge, Chrysler, and Ram thereby killing tens of thousands of factory jobs and the ripple effect of that in the component industry. Thus, it would be up to the UAW to protect jobs.

If Marchionne were serious about a merger, a company like Hyundai/Kia would be much more logical.

Merging two weak companies never works.