Fiat CEO in Berlin to pitch plan for Europe giant

Fiat SpA's chief executive visits Berlin on Monday to try to convince Germany's political leaders to sign up to his vision for a new European car giant by letting him take over General Motors Corp's Opel unit.

Sergio Marchionne goes to Berlin with a one-month deadline in his sights, a newspaper report said, less than a week after he sealed a deal with Chrysler to form a partnership.

His plan would involve spinning off Fiat's core car business into a new company including Chrysler and GM Europe and listing it on a stock exchange.

"An agreement in principle has to be struck in 30 days," he said in an interview in the Financial Times on Monday about a deal with Opel.

Fiat's shares jumped 6.5 percent in early Milan trade while the DJ Stoxx European auto sector rose 1.1 percent.

Combining with Chrysler and Opel fits in with Marchionne's strategy for guiding Fiat through the auto industry's current crisis.

He has often said a carmaker had to make more than 5 million vehicles a year to be able to make a profit, and in December he said Fiat did not have the scale to survive the shake-out as a standalone company.

A Fiat statement on Sunday said Fiat, Chrysler and GM Europe would together have annual revenues of about 80 billion euros ($106.3 billion). It did not mention Opel, which makes up 80 percent of GM Europe's revenue.

Marchionne told the Financial Times that Fiat and Opel would reap synergies of 1 billion euros a year from the deal.

"From an engineering and industrial point of view, this is a marriage made in heaven," he was quoted as saying.

The biggest opposition to a deal between Fiat and Opel will come from the unions in both countries. They fear the eventual cost savings to come out of a merger would lead to job cuts and plant closures.

The new company, tentatively called Fiat/Opel, would merge their small B and midsize C segment car platforms, and absorb Fiat's ultra-small A platform and Opel's upper-middle D platform, the Financial Times said.

Marchionne plans to ask the British government and administrations in other European countries where Fiat and Opel have plants, to offer the new company loan guarantees, the FT said.

He will say the deal is important for Europe, currently being battered by an economic downturn, the paper said.

"This is a real opportunity to make the European Union work as a union," he was quoted as saying. "If we don't do this, it's a failure of our efforts to create a single market."

The new company would see the Agnelli family's 30 percent shareholding of Fiat Auto diluted after the spin-off, with GM also a minority shareholder in Fiat/Opel, the paper said.

The merged company would also include Saab, GM's small Swedish brand which it is selling separately, the paper said.

The new company may also include GM's Latin American operations, the FT reported.

Ferrari and Maserati luxury carmakers would stay with the parent, the paper said.

The FT said Marchionne was considering stepping down next year as non-executive vice-chairman of UBS.

German Economy Minister Karl-Theodor zu Guttenberg said he did not expect a final decision on the future of Opel to come out of his meeting with Marchionne on Monday.

"Today I just hope that I hear something more concrete than the rough draft that has already been presented to me," he told German radio, adding he was open to any potential investor.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement