Marchionne Calls For GM Takeover Just Short of Hostile

We have to hand it to Larry P. Vellequette at Automotive News for getting FCA’s Don Marchionne riled up. In addition to getting Sergio talking yesterday about automakers having a history of bending the unions over, the outspoken executive has now called for a General Motors takeover via a series of hugs increasing in their intensity each time.

“There are varying degrees of hugs. I can hug you nicely, I can hug you tightly, I can hug you like a bear, I can really hug you,” said Marchionne to Vellequette. “Everything starts with physical contact. Then it can degrade, but it starts with physical contact.”

And no, that’s not even the best part.

Marchionne asserts he and the board of directors have no choice but to pursue General Motors based on the numbers.

“We’re not talking about marginal improvement in margins,” Marchionne said, “we’re talking about cataclysmic changes in performance, just huge.”

And how sweet is that EBITDA figure?

“Look, the combined entity can make $30 billion a year in cash. Thirty. Just think about that fucking number. In steady-state environments, it’ll make me $28 to $30 billion.”

Yet, General Motors refuses to look at the numbers, with GM CEO Mary Barra stating in June that GM is busy “merging with ourselves.”

The relatively short piece from Automotive News is filled with that will likely become a Greatest Hits album for both Vellequette and Marchionne with lines like:

“It would be unconscionable not to force a partner,” he said

…

“I’ve offered to sit down with them and take them through the numbers,” said the Italian-Canadian CEO as he sipped an espresso and swiped through documents on his tablet, giving his visitors a cursory look at various charts and graphs he says make his case.

“They won’t listen. And that kind of abject refusal to engage … the capital markets won’t understand why you are rejecting the discussion.

“You may reject the deal but you can’t reject the discussion. If you’re refusing to talk to me, and you have seen nothing, you either think you’re above it all, or you think the capital markets are full of schmucks that owe you something.”

…

“There have been responses of people who have shown interest in discussing,” he said. “Are they the people I wanted to get the response from? The answer is probably not. There are people who are interested in doing deals. I’m not interested in doing deals with them … because there’s a better deal.”

…

“Why,” asked a high-ranking GM executive, “should [GM] bail out FCA?”

…

Asked directly, a GM spokesman wouldn’t call Marchionne’s analysis wrong but said GM officials believe the company and its shareholders are better off on their own.

Last emphasis mine.

If GM officials think that shareholders want anything other than increased profits, those officials are going to be in for a rude awakening — when they’re out of jobs after the dust has settled.

Everyone, especially a shareholder, has a price.