Chrysler Group LLC Chief Executive Officer Sergio Marchionne faces an "exceptionally tough" challenge in merging the U.S. automaker with Italy's Fiat SpA, General Motors Co. Vice Chairman Bob Lutz said.
Combinations in the same region are easier because the company needs to deal with only one set of laws, suppliers, unions and taxes, Lutz, 77, said in a Bloomberg Television interview taped to air tomorrow.
"Trans-Atlantic mergers are exceptionally difficult to pull off," he said. "When you're on two sides of the Atlantic, you need a plant here, you need a plant there. You need a tax department in Europe, you need a tax department in the U.S. It's going to be exceptionally tough to get a whole lot of structural cost out of that organization and make it work."
Chrysler has been run by Fiat since June 10 under a U.S. government-aided bankruptcy reorganization. Marchionne, 57, is also CEO of Turin, Italy-based Fiat. He's trying to halt a U.S. sales skid that since 1998 has pushed Chrysler to fifth from third, under former owners Daimler AG and Cerberus Capital Management LP.
Shawn Morgan, a spokeswoman for Auburn Hills, Michigan- based Chrysler, declined to comment about Lutz's remarks.
Marchionne has done a skillful job of revamping Fiat, said Lutz, whose 46-year career in the industry includes stints with all three U.S. automakers and Bayerische Motoren Werke AG.
The full interview with Lutz is scheduled to air on "For the Record" at 8:30 p.m. New York time tomorrow.
