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Is General Motors Fiat’s Next Target to Invade USA?

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Published on : Jun 22, 2015

Is the Italian car maker targeting on General Motors next? Fiat departed the United States in the 1980s. The last two cars sold by Fiat in the U.S. were the two-seater mid-engined 124 and X 1/9 convertible. However, the U.S. market did not show much acceptance for these cars and were pulled out of the country in 1983.

It was only after the new Fiat 500 was launched, the company made a comeback to American soil. First it was to save Chrysler in 2009 to keep it from bankruptcy, and now the North American invasion of Fiat is to firm position with General Motors.

The merger between the two has quite a bit of hostile feeling to it. Both the auto firms Fiat Chrysler Automobiles and GM are backed by investment banks to undertake the current stand-off, which business insider are calling a ‘forced merger’.

UBS is advising Fiat whereas Goldman Sachs stands with GM. However, as per GM commentator, having Goldman Sachs into picture is not related with the Fiat Chrysler deal.

As per report, GM board members are not in favor of the merger. But, this has not stopped Fiat’s top shot Sergio Marchionne from devising a plan to take GM into Fiat’s fold. Machionne is devising plans for investors for GM, which will entice them to come onboard GM for further negotiations with Fiat. 

As per Benchmark Reporter, Machionne sent a mail to GM’s CEO proposing a merger, which was rejected. This is further leading to continued merger talks which comes as a forced takeover by Fiat.

It seems Machionne is not bothered about the power grab, but is more concerned about the longevity of the auto sector. Each year, adapting to CAFÉ standards that are currently in place and facing R&D causes massive expenditures.

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