Sergio's got 'em talking — about him.
General Motors Co. CEO Mary Barra said Thursday the automaker is "not going to entertain anything that distracts us," essentially dismissing any merger overture from her counterpart at Fiat Chrysler Automobiles NV.
Ford Motor Co.'s Americas boss, Joe Hinrichs, said pretty much the same thing earlier in the week, reprising Bill Ford Jr.'s off-hand remark to me on the auto show floor in January that Marchionne "can look elsewhere" for a partner.
This industry pot-stirring is not new for Sergio Marchionne, the FCA CEO whose cold-eyed business logic in soliciting a tie-up carries a faint whiff of desperation. The goal is to bolster his company's comparatively challenged financials, to share product development costs and to expand its global footprint before another crisis forces an ill-suited consolidation.
But Marchionne's persistence in good times is new. The industry's shrewdest deal-maker is enunciating what his Detroit peers choose publicly to ignore: namely, that the enormous capital demands of developing and building technologically advanced lineups will continue to strain all but the most deeply capitalized players.
FCA is not one of them. Despite sales numbers that regularly outperform in the U.S. market, its earnings lag most of the competition. Its overall debt load is comparatively higher, its margins lower. Its smaller market position in critical Asian markets is not enough to offset exposure to Europe's brutal volume care market.
Still, capital demands expand. Players need global scale; they need comprehensive lineups, each attuned to regional markets and requirements; they need engine and emissions and alternative-fuel technologies that keep pace with — and anticipate — constant regulatory change that more reflects the demands of regulators and politicians than those of paying customers.
"What's really driving the portfolio of American automakers is" carbon dioxide "regulation," Marchionne said earlier this year, a theme he's since revisited often. "It's the CO2 stuff that's wagging the dog. Given the way the rules are written, technology will be introduced at a greater rate."
It will cost more, too, whatever the customer demand — or lack thereof — in a marketplace still answerable to average people making their own choices about what to drive and how much they're willing to pay for it.
Marchionne's boss, FCA Chairman John Elkann, a scion of Fiat's founding Agnelli family, is joining the chorus. In his letter to shareholders of Exor SpA, the family holding company that owns 29.19 percent of FCA, Elkann said he's "convinced" the global auto industry "needs and will see more consolidation in the future."
"Hopefully, this will be driven by reason and common sense rather than by crisis and will take into account the importance of identity and culture, as we have done, avoiding the all too typical divisive trappings of a takeover and creating instead a shared transnational culture," he wrote. "This is one of the most important lessons learned from combining Fiat and Chrysler to create FCA."
Maybe so. Given the disaster that was Daimler-Benz AG's acquisition of Chrysler Corp., or the middling results of GM's unwound "alliance strategy" with Asian partners, or Ford's aborted assemblage of European luxury brands, Marchionne's FCA stands as a comparative success that has consistently exceeded expectations.
Whatever success FCA achieved in building the "transnational" culture Elkann touts, it bears reminding that a) it was born out of desperate times seized by b) a charismatic leader whose c) own transnational background as an Italian educated in Canada helped make it all work. All that and his uniquely direct management style.
Memory dies hard in this business. Notwithstanding the global sales leadership of multi-brand Volkswagen AG, the path to success in the global auto industry is proving consistently to be paved with fewer brands, not more; less complexity, not more; a corporate culture shared across borders, not defined by them.
Does a GM with a near-fortress balance sheet and a winnowed brand portfolio, or a Ford with fewer brands, higher earnings and its own founding family, recognize the pressures Marchionne is airing publicly? Sure they do.
But that doesn't mean they feel an obligation to help him ease the pressures on the automaker he formed from a bankrupt Chrysler and a troubled Fiat SpA — the legacy Marchionne and his boss are trying to secure with a partner to be named later.
Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at http://detroitnews.com/staff/27151