Does GM’s European Sale Indicate the Start of Merger Mania in the Auto Industry?

6


After PSA Group, a French conglomerate, bought GM’s Opel this week to become the second-largest carmaker in Europe, it could be a signal that more tie-ups are coming, agree some leading industry executives.

Sergio Marchionne, CEO of Fiat Chrysler Automobiles, has long called for consolidation within the auto industry, as well as an aggressive “rationalization of capacity,” a fancy way of referring to plant closings and job cuts. The alternative, he has warned, will be wholesale economic catastrophe the next time the global auto industry goes into a slump, with some manufacturers failing and investors unwilling to give others the funds they will need to revive.




Fiat Chrysler Automobiles CEO Sergio Marchionne speaks at the 2017 Geneva Motor Show in Geneva, Switzerland.