General Motors and Fiat Chrysler Automobiles (FCA) have turned to investment banks for help to deal with a stand-off as FCA seeks to force a merger with its Detroit-based rival, according to sources familiar with the matter.

GM is being advised by Goldman Sachs, while FCA is working with UBS on the matter, several sources said, with one adding that Morgan Stanley was also working with GM.

GM’s board rebuffed a merger proposal from the Italian-American carmaker earlier this year and chief executive Mary Barra said last week she had no interest in a combination.

But Barra’s rejection has not stopped FCA boss Sergio Marchionne working on a merger plan, according to the sources. He is lobbying GM investors in an effort to drag the GM board to the negotiating table, they said.

Meanwhile, FCA is working with Swiss bank UBS on its strategy, while Fiat’s founding Agnelli family, which holds around 30 per cent of FCA via investment vehicle Exor , is being advised by Lazard, the sources said.

Marchionne – who turned 63 on Wednesday – has argued that the global auto industry needs a dramatic consolidation to share prohibitive capital costs.

Global rivals in the sector face mounting costs to engineer vehicles that emit little or no carbon dioxide, and can avoid collisions using complex robotic driving systems.

FCA’s move on GM also comes amid concerns that the industry is heading for a downturn which would hammer company valuations.

Ferrari was set to hit the stock markets in the first half of 2015

“For Marchionne it’s now or never,” an industry banker said, saying that industry valuations had reached their peak.

FCA, the world’s seventh-largest carmaker with a market capitalisation of $20 billion, has one of the highest debt piles in the industry, with net industrial debt at €8.6 billion.

Much of FCA’s market value is tied up in Ferrari, which Marchionne has often described as a “phenomenal carrot” to investors.

Sources close to FCA said any merger with GM would not include Ferrari since the Agnelli family wants to retain control of the luxury unit and go ahead with a listing plan.

Ferrari was initially set to hit the stock markets in the first half of 2015, but FCA subsequently pushed the listing back to at least mid-October.

GM does not have a single controlling shareholder, and its top investor is Brock Capital Group with an 8.7 per cent stake. Brock Capital is the fiduciary that manages the shares for the United Auto Workers healthcare trust for retired workers.

Analysts said the US labour union would view a GM-FCA merger with scepticism because of the potential resulting job losses.

Meanwhile, hedge funds control around 6 percent of the shares. Based on expectations that shareholders would demand a 35 percent premium to GM’s market capitalisation, FCA would need to pay about $77 billion in an all-stock transaction in the event of a hostile bid, the sources said, adding that GM shareholders would likely demand a substantial payout.

But FCA would be under enormous financial strain if it decided to pursue a hostile bid, the sources said.