Shares of Fiat Chrysler Automobiles NV (NYSE:FCAU) rose about 5% on Tuesday and Wednesday after analysts speculated that a possible deal to sell General Motors' (NYSE:GM) European subsidiary could open the way to a GM-FCA merger of some kind.

If you've been watching this news and considering an investment in FCA, I've got some advice for you: Think twice. Here's why.

It's clear why FCA likes the idea of a deal with GM

FCA CEO Sergio Marchionne first floated the idea idea of a merger between the two old Detroit giants back in 2015. As I said at the time, it's clear what FCA would get out of such a deal. FCA today is profitable, but it's heavily burdened with debt, key products like its Ram pickups are in need of updates to stay competitive, and it's far behind many global rivals when it comes to advanced technologies like self-driving and electric cars.

FCAU Price Chart

FCAU Price data by YCharts.

For the most part, Marchionne has done a good job of putting the Italian-American automaker's limited cash to best use, making FCA's product line a lot more competitive in recent years. But FCA has a lot of needs, only so much cash (and engineers and designers) to go around, and a sense that much needs to be done urgently, before the next global economic downturn squeezes FCA's still-slim profit margins.

GM, on the other hand, has a fresh and competitive product line, modest debt, an investment-grade balance sheet, a sizable cash hoard, and sharp management focused on generating the best possible returns on its investments. All of that could do wonders for FCA -- but it's also why this deal will almost certainly never happen.

But what would GM gain? 

As an unnamed senior GM executive said to trade publication Automotive News back in 2015, why should GM have to bail out FCA?

Under CEO Mary Barra, GM has been laser-focused on remaking itself into a company that can deliver strong returns to its investors for many years to come. Unlike FCA, GM has made big investments over several years to position itself well for the future: GM has emerged as a leader in electric cars, it's (credibly) working to be a leader in autonomous vehicles, and it's exiting regions and businesses in which it doesn't see a clear path to sustainable profits. 

Mary Barra speaking at a GM podium.

CEO Mary Barra has GM looking to the future. For Barra, a merger with FCA would be a step backward. Image source: General Motors.

Meanwhile, GM's current product line is coming together nicely. GM has refreshed or reengineered most of its global sedan models over the last few years, and now it's launching a wave of all-new crossover SUVs that should give its profits another boost over the next few years, along with its already-fast-improving reputation for quality. 

GM, Barra has said repeatedly, already has all the scale it needs to be sustainably competitive around the world for years to come. GM trails giants Volkswagen AG (OTC:VWAGY) and Toyota Motor (NYSE:TM) in global sales, but not by much (though the gap will increase if GM sells Opel and exits Europe). It's already solidly profitable and on a clear path to boost its operating margins further over the next few years.

A 2017 Chevrolet Bolt EV.

FCA is years away from matching the technology in GM's electric Chevrolet Bolt. Image source: General Motors.

There's no win-win to be found here

What would GM gain from taking on FCA, aside from years of headaches and costs? Long story short, it's very hard to see any benefits for GM from such a combination that would be worth the expense and distraction. That's why I think investors would be very unwise to bet on a merger between the two old competitors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.