GENEVA – Two years ago, Fiat Chrysler CEO Sergio Marchionne pursued a merger with General Motors so ardently pundits said it looked more like a stalker situation than a courtship.

His advances eventually were firmly rebuffed by GM’s board, but he continues to insist the auto industry needs to consolidate if it wants to improve efficiency, cut costs and get stock prices out of the doldrums.

At a press conference during the Geneva Auto Show following the announcement GM was selling its European Adam Opel and Vauxhall brands to French Automaker PSA Peugeot Citroen, Marchionne expresses a sense of vindication. He says he is encouraged by the GM-PSA deal “Because it recognizes the importance of consolidating businesses in order to increase economies of scale.”

“There’s no doubt it is a step in the right direction,” he says and predicts it will trigger more deals, especially if Carlos Tavares, chairman of the managing board of PSA, is successful.

“Aggregation of these businesses is absolutely crucial. You need to achieve scale. If you don’t we’re going to continue seeing marginal returns.”

Marchionne says consolidation is especially important in Europe because European automakers did not close plants and slash production capacity like the Detroit Three did during the economic crisis of 2008-2009.

The higher profit margins U.S.-based automakers currently enjoy are directly related to their ability to match manufacturing capacity more efficiently with demand, he says.

During the 2009 crisis period in the U.S. “We cleaned up our manufacturing footprints,” he says. “This did not happen in Europe.”

Selling Opel helps GM get rid of a perennial money loser, but it also severely limits its participation in the world’s third-largest automotive market. Some think this creates an opportunity for Marchionne’s FCA, which has big footprints in Europe as well as in North America that could be folded into GM operations.

Marchionne says the elimination of Opel reduces by about 15% the possible synergies FCA and GM could achieve, but he still thinks a deal would be worth pursuing, even though he spotted one big negative the day of the sale’s announcement.

“During the presentation (about the sale), GM referred to Europe presenting ‘geopolitical risks.’ That shocked me out of my pants,” Marchionne says.  

“I’ve heard Europe described in a variety of fashions but to describe the old continent as offering geopolitical risks to a multinational (corporation), I think is stretching the thing out of proportion. And if that is true and that’s the view inside General Motors, then I’m not sure we are the right answer for General Motors.

“On the other hand I think there were positive comments made by GM President Dan Ammann about scale. And the minute you admit that scale has relevance then I think this whole notion about bringing businesses together to achieve scale is a good thing.”

When a reporter presses him and asks if he sees GM’s door open or closed, Marchionne makes it clear he would not be shy about approaching GM again.

“I never close any doors. It’s almost impossible for me to close the GM door because I never opened it. I knocked on the door and nobody opened it, so that’s true. I would not be embarrassed to do it. I could knock on any door if I thought it was a good thing for the business to do it, absolutely, without even blinking.”

dwinter@wardsauto.com