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Bloomberg
Fiat Chrysler Chief Executive Officer Sergio Marchionne is putting his search for a merger on the back burner as he focuses on reaching the Italian-American carmaker’s goal of eliminating debt before he retires in 2019.
“We need to be very careful that we don’t start unrealistic dreams about consolidation as we are on our way to achieve historically important results and a debt-free position,†Marchionne told investors in Amsterdam at the company’s annual general meeting. “We are not at a point of time to discuss any alliance.â€
Marchionne, 64, has been a longtime proponent of consolidation, arguing that the auto industry wastes money by developing multiple versions of the same technology. Since General Motors Co. rebuffed his approach for a merger two years ago, Marchionne has sought to eliminate debt at Fiat Chrysler to make the carmaker a more attractive partner down the road.
Marchionne said in March he expected an eventual approach by Volkswagen AG for a combination after PSA Group’s move to purchase GM’s Opel unit. He made clear Friday that no discussions are being held with VW, nor is he seeking a deal with Tesla Inc.
He added that GM’s rejection of a tie-up with Fiat Chrysler was a missed opportunity and that the reasons for consolidation in the industry remain valid. Fiat Chrysler Chairman John Elkann said at the meeting that the carmaker isn’t “desperate†to find a partner and would only consider a combination if it makes the company stronger.
Still, Marchionne is looking for cooperation agreements to share investments in technology and reduce costs. Fiat Chrysler, the first major carmaker to start a self-driving venture with Google, is continuing to discuss expansion of the project and may announce a new technology partnership by the end of the year, he said. Marchionne reiterated his successor will be an internal candidate. Elkann added that Marchionne’s replacement will be confirmed at the company’s 2019 annual general meeting.
The CEO said Fiat Chrysler’s first quarter was weak because it’s retooling its plants in the US after ending production of the Chrysler 200 sedan as part of a plan to scrap production of lower-margin cars for more profitable sport utility vehicles. He expected the automaker to meet its 2017 targets, including at least a 20 percent increase of adjusted net income.