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The Irish Times is reporting that FCA US may be trying to line up GM's investors to force a discussion of a merger. Accordingly, the report goes on to say that GM is enlisting advisors (also called lawyers) to be sure it is ready if it comes to a forced merger, buyout or some other form of pressure to merge. Sergio Marchionne is one of the most accomplished heads of any automaker. Although very soft-spoken, he generally gets what he wants and his views are often ahead of the curve. He is well known to have said that car buyers don't care about things like engines and transmissions and that the larger automakers should simply team up to achieve even greater economies of scale. You are reading this at an enthusiast site, so you and I DO CARE about engines and other truck parts. Be honest though, most of our neighbors and relatives can't look at a car and tell which wheels are driven. How would you feel about a merger between Ram's owner and the folks at GM that make Chevy and GMC trucks? -
When GM went through its bankruptcy restructuring, it wasn't a typical one. GM was allowed to get rid of what it didn't want (debt, dealerships, brands, liability) and keep what it wanted - Billions in tax breaks it had accumulated while it was the "old GM." In case you're wondering, that never happens. The usual deal is the company that goes through the restructuring starts over with a new tax situation. It isn't small money. GM still has $34 BILLION in tax breaks it can apply to profits. As the Forbes story and many others point out, GM does not have to pay taxes on its profits for decades if it chooses not to. Apparently, in a merger those breaks would be lost. What the Forbes story assumes is that a GM merger would have to be structured like other mergers and follow financial rules and laws.
