NEW YORK (TheStreet) -- General Motors (GM) has hired Goldman Sachs (GS) to advise top management with regard to merger or alliance proposals from Fiat Chrysler Automobiles (FCAU), which GM has publicly declined, said a Reuters report that cited unnamed sources.
GM also is being advised by Morgan Stanley (MS), a longtime and traditional GM investment banker, while Fiat Chrysler is working with UBS (UBS), Reuters reported. Goldman Sachs has for decades been a banker to Ford (F).
Goldman has worked with Fiat and was an adviser to GM in February, when hedge funds representing 2.1% of GM's shares demanded an accelerated share buyback and a seat on GM's board, according to Reuters. The initiative ended in a truce, with GM agreeing to buy back shares and raise its dividend, although it didn't give up a seat on its board.
Fiat Chrysler CEO Sergio Marchionne, without advancing specific intentions or plans, has been advocating publicly that the global auto industry must pursue consolidation to stem a ruinous loss of capital because of the high cost of technology, environmental compliance and new-model development. With many brands and models, debt-laden Fiat Chrysler lacks the scale to renew its fleet as fast as competitors can.
GM CEO Mary Barra has spurned Marchionne's request to discuss a possible combination of the companies or a collaboration. She confirmed press reports that the Fiat Chrysler's chief had contacted her.