General Motors’ top European executive said Fiat Chrysler Automobiles chief executive Sergio Marchionne is on the right track with his efforts to streamline the auto industry.
“He’s right,” Karl-Thomas Neumann, the head of GM’s Opel unit, said outside the German carmaker’s headquarters in Ruesselsheim near Frankfurt. “It doesn’t makes sense to develop things 10 times all over again. There is need to consolidate” in the car industry.
In an April 29 presentation, called “Confessions of a Capital Junkie,” Marchionne said the auto industry had a dim future because multiple manufacturers develop the same technology only to reap margins that are too thin to recoup their investment. After completing the deal that created the world’s seventh biggest carmaker late last year, he has urged automakers to merge but has been rebuffed by other executives, including GM CEO Mary Barra. Neumann, who ultimately reports to Barra, said he also doesn’t see a deal with Fiat.
While Marchionne has said a deal between GM and Fiat would be “technically feasible,” Barra has said America’s biggest automaker can earn better returns on its own. Neumann, a former executive at Volkswagen, said Opel is focused on creating scale by making better use of GM’s resources.
“The industry needs to improve volumes, scale and utilization,” but for Opel it was the “wrong” move to look for such benefits outside GM by partnering with France’s PSA Peugeot Citroen, Neumann said. The cooperation between Opel and Peugeot has been scaled back from its original aims and now focuses on selected projects.
