Fiat CEO in Berlin to pitch plan for Europe giant
Monday 04 May 2009
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.
- 1 Scientists create transparent mouse complete with see-through organs
- 2 Pope Francis issues top 10 tips for happiness
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 Putin v Obama: Russian deputy prime minister mocks president with catty pictures on Twitter
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness
Kenny Ireland dead: Benidorm actor dies aged 68
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Putin v Obama: Russian deputy prime minister mocks president with catty pictures on Twitter
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Boozy, ignorant, intolerant, but very polite – Britain as others see us
- < Previous
- Next >
iJobs Money & Business
£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...
£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...
£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...