DETROIT (Reuters) -- General Motors CEO Mary Barra said that Fiat Chrysler Automobiles chief Sergio Marchionne sent her an email proposing a potential merger, and that GM's board gave "strong support" to her strategy of going it alone.
Marchionne has been conducting a campaign to persuade rival automakers that the auto industry needs another round of consolidation. FCA Chairman John Elkann said last month that the automaker had reached out to rivals, particularly GM.
Marchionne's proposal was "very much vetted with management and our board," Barra said on Tuesday ahead of the automaker's annual meeting. "We are committed to our plan and we have strong support,"
Marchionne has said automakers should collaborate to achieve greater economies of scale as they develop new vehicles and technologies required to comply with tougher emissions rules in the major global vehicle markets.
Marchionne is reaching out to hedge funds and activist investors to help persuade General Motors Co to agree to a merger, the Wall Street Journal reported on Monday, citing people familiar with the matter. Marchionne has been emboldened by the recent success of activist investors at GM and sees them as a means to consolidate the auto industry, the newspaper said, citing sources.
Marchionne's contacts with activist investors, however, have not yet landed a patron, and a similar strategy could be used with at least one European carmaker, the WSJ said.
Elkann, responding to a question about whether FCA would consider a hostile bid for GM, said the company would "act with determination if there are the prerequisites to do something that makes sense," without giving any details.
Barra, in her remarks, didn't respond directly to the approach from FCA, but made it clear she's not interested in a combination.
"We are merging with ourselves," Barra said, a reference to years of effort by GM executives to consolidate overlapping, duplicative engines, transmissions and vehicles in the company's global model lineup. "We're focused on our plan," Barra said. "We have scale. We have leveraged the appropriate opportunities."
On a separate issue, Barra said GM has "cooperated fully" with a U.S. Department of Justice investigation of the company's more than decade of delay in recalling vehicles equipped with defective ignition switches. The switches could slip out of the run position inadvertently, cutting power to airbags, steering and other systems. A compensation fund set up by GM has made payments in connection with 111 deaths linked to the defects.
Barra didn't comment in detail on a separate report Tuesday by the WSJ that the Justice Department is considering wire fraud charges against GM. Any settlement of the case would be on the Justice Department's timeline, Barra said.
"Anything beyond that is pure speculation and does no one any good," Barra said.