Fiat CEO's Auto-Merger Confession Called 'Spot On' by Investors - Bloomberg

After failing to win over fellow auto executives with his call for mergers, Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne is at least getting his point across with some of those companies’ owners. Months of fruitless appeals and subsequent rejections from General Motors Co. and others prompted Marchionne to expound on the benefits of consolidation in a 26-page presentation , called “Confessions of a Capital Junkie. “Marchionne is spot on,” said David Herro, manager of the $31. 4 billion Oakmark International Fund, which owns stock in carmakers as well as Fiat’s controlling shareholder Exor SpA. “The entire industry needs transformative M&A. We would be strongly supportive of industry consolidation. Quoting Lewis Carroll’s “Through the Looking Glass,” Marchionne’s warns that the auto industry is “a slow sort of country,” with a dim future because companies need to run very fast just to stay in place. “Marchionne is right,” said Emanuele Vizzini, chief investment officer at Investitori Sgr in Milan, who manages $3. 8 billion including shares in Fiat, GM and Ford. “While margins in North America are now high and close to a peak for GM and Ford, the structural problems of the auto industry are still there. Source: www.bloomberg.com