NEW YORK (TheStreet) -- If Sergio Marchionne, CEO of Fiat Chrysler Automobiles (FCAU), wants to be successful in convincing General Motors (GM) to merge, join an alliance or participate in a significant joint venture, he will have to overcome opposition from GM's top management and the automaker's directors.
That's probably why he's been recruiting activist investors to pressure GM toward a tie-up with FCA, as was reported by The Wall Street Journal. But Marchionne likely is exploring other options and partners as well, which makes Fiat Chrysler's stock more attractive now than shares of GM.
A GM spokesman, responding to the Journal story, said GM isn't opposed to partnerships. He offered GM's tie-ups with Honda (HMC) for fuel cells and Ford (F) for transmissions as examples. But GM doesn't need a full-scale consolidation and "all the baggage" that comes with it, the spokesman said.
Exclusive Look Inside:
You see Jim Cramer on TV. Now, see where he invests his money and why GM is a core holding of his multi-million dollar portfolio. Want to be alerted before Jim Cramer buys or sells GM? Learn more now.
In March, three activist hedge funds controlling 2.1% of GM's shares were successful in demanding the automaker spend $5 billion, more cash than it had been planning to spend for a share buyback and an increase in its common stock dividend. GM's willingness to compromise when pushed likely told FCA that the automaker is avoiding conflict with activists, which may have encouraged Marchionne to try.