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General Motors Co. CEO Mary Barra confirmed Tuesday she received a letter from Fiat Chrysler Automobiles CEO Sergio Marchionne regarding a merger.

"There was an email that was very much vetted with management and our board," Barra told reporters ahead of GM's 50-minute annual shareholder's meeting in Detroit. "And after we reviewed that, we are committed to our plan. We think that's in the best interest of General Motors shareholders, and we have strong support."

GM received the FCA's letter in the spring and sent a letter responding to Marchionne.

Late Monday, the Wall Street Journal reported, citing unnamed sources, that Marchionne was trying to persuade activist investors to prod GM to consider a merger with FCA. Marchionne has already approached GM about a merger and has been pushing for consolidation in the auto industry. Barra in April dismissed any mergers, saying "we're not going to entertain anything that distracts us" from meeting GM's short and longterm profitability plans.

Fiat Chrysler declined to comment on the Wall Street Journal report.

Citi Research analyst Itay Michaeli, in a note to investors Tuesday, said GM's share price could benefit if management resists a merger deal or if a merger/acquisition deal is structured to win support of shareholders.

He told investors to buy GM stock and set a $50 price target.

Barclays Capital Inc. analyst Brian A. Johnson, in a research note Tuesday, said Barclays thinks a potential merger between GM and FCA is a bad idea but it may have short-term upside for GM's stock.

GM's stock closed up 27 cents a share Tuesday at $35.26. FCA's stock closed down nearly 2 percent Tuesday at $15.29 a share.

Barra said GM remains on plan to achieve 10 percent adjusted margins in North America next year, to keep strong margins in China and return to profitability in Europe next year.

"We're achieving industry leading return on invested capital. We have scale and we're leveraging that scale," Barra said. " I'd say the last couple of years we've really been merging with ourselves. We're seeing the benefits of that. There's still more to harvest and we intend to do that."

Marchionne for months has been calling for consolidation of the global auto industry, arguing companies are wasting billions of dollars in research and development of duplicate projects. He argues that the capital could be used to help ease the heavy investments needed to meet demands for cleaner, more technologically advanced future vehicles.

GM partnered with Fiat in the past and ended up paying $2 billion to exit that agreement in 2005.

Last year, GM's annual shareholder's meeting fell in the midst of the ignition switch crisis, just months after it started recalling 2.59 million older Chevrolet Cobalts, Saturn Ions and other small cars for ignition switches that can turn off while driving, released a scathing internal report into the delayed recall and set up a victims compensation fund.GM initially tied the defect to 13 deaths but that has risen to 111.

The automaker faces investigations by the Justice Department, 50 state attorneys general, the U.S. Securities and Exchange Commission and Canadian officials for the delayed recall. Last May, GM admitted wrongdoing and paid a record $35 million fine to the National Highway Traffic Safety Administration and agreed to up to three years of enhanced oversight, some of which is continuing for at least another year.

In February, Harry J. Wilson, a former Obama administration auto adviser who helped craft GM's bankruptcy and bailout, notified GM he intended to nominate himself to the board and bring a proposal seeking the automaker to repurchase $8 billion in stock by mid-2016. A month later, GM and an investment group led by Wilson announced that GM plans to buy back $5 billion in stock through the end of 2016. Wilson withdrew his nomination for the board and his stockholder proposal.

When asked about GM's stock price Barra said there is room to grow.

"Clearly, we think that there's opportunity but we've got to earn it," she said.

GM shareholders, according to preliminary results, approved 12 board members including new member Joseph Jimenez, CEO of Switzerland based Novartis International AG, a pharmaceutical company.

Shareholders also ratified its public accounting firm Deloitte & Touche LLP, approved an advisory vote on executive compensation and voted downtwo stockholder proposals that called for creating a policy for an independent board chairman and cumulative voting.

Staff writer Michael Wayland contributed.

mburden@detroitnews.com

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