Sergio Marchionne, the CEO of Fiat Chrysler Automobiles, has said that the combination of General Motors (GM) and Fiat Chrysler would produce good numbers that it would be "unconscionable" for his company not to force a merger with GM, according to a report from Automotive News.
He said that the combined company could produce $30 billion a year in cash.
Marchionne told Automotive News that the combination of GM and Fiat Chrysler has a logic to it that is "irrefutable."
"We're not talking about marginal improvement in margins," he said. "We're talking about cataclysmic changes in performance, just huge."
He adds that the potential profits are larger than the current combined global earnings of GM and Fiat Chrysler, according to Automotive News.
He mentioned that the combined company can produce EBITDA of $30 billion in cash annually. He didn't specify though how he arrived at the figures.
Arndt Ellinghorst, head of the global automotive research at Evercore ISI, told Automotive News that the figures Marchionne arrived at are realistic.
"A combined GM-FCA will generate almost $25 billion in EBITDA this year," he said. "If you assume some synergies and peak U.S. cycle market conditions then, yes, they could get to 30 billion in EBITDA."
Marchionne told Automotive News, though, that GM isn't answering his phone calls.
"I've offered to sit down with them and take them through the numbers," he said.
Reuters reported that GM's board has already turned down Fiat Chrysler's proposal for a merger earlier this year.
The rejection though has not stopped Marchionne.
In addition to that, the report mentioned that in June, sources said that Marchionne continued working on the plan and to lobby investors of GM.
Involving the investors is Marchionne's way of dragging GM's board into the discussion table.
Automotive News reported, though, that GM insiders are questioning Marchionne's assertions about synergies.
They suggest that a merger with Fiat Chrysler won't be good for GM.
A high-ranking official in GM told Automotive News that why would they bail out Fiat Chrysler with this merger.
However, Marchionne is still unfazed as he stands by his claims despite the difficulty of achieving a deal with GM.
"The benefits are so high that I don't think you can stop the machine," he said.
