The proposed Italian-American partnership between Fiat and struggling US car maker Chrysler has been thrown into a tailspin following revelations that the Italian car maker has made a secret offer to purchase a majority stake in Opel.
The chairman of Opel’s works council, Klaus Franz, today confirmed Fiat’s interest in a takeover of General Motor’s troubled European subsidiary, suggesting that officials have cleared the way for a signing of a letter of intent by as early as next Tuesday, 28 April.
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Fiat hasn't commented on the speculation, but issued a statement on its negotiations with Chrysler. It said: ""Final terms for this transaction continue to be negotiated with the US Treasury and other relevant stakeholders. If negotiations are concluded successfully, final terms will be set on or before 30 April, 2009."
Opel has been in intensive talks with US-based component and systems supplier Magna on a possible partnership over the past month. However, talks between the two companies have apparently broken down following Fiat’s surprise bid for Opel.
Officials from Opel parent General Motors in Detroit and German government officials are said to back Fiat’s plans for a quick and streamlined takeover of Opel. However, high-ranking Opel officials are rumoured to favour a partnership with Magna.
Franz has vowed to block any move by Fiat to go ahead with a takeover of Opel, saying that it would lead to “dramatic job losses and factory shutdowns in Germany” owing to overlaps in the two brands' respective product line-ups. Fiat is parent company to a range of different makers, including Alfa Romeo, Lancia, Maserati and Ferrari.
Franz also suggests Fiat is deep in debt and would only be a further financial drain for Opel, which recently appealed to German chancellor, Angela Merkel, for a government-backed financial rescue package.
“We know the bride,” said Franz in an interview with the Deutsche Press Agency, in relation to Fiat’s earlier failed partnership with Opel, which broke down in 2005 and led to General Motors making a 1.55 billion Euro (£1.4 billion) payout following a decision not to purchase the Italian car making giant.
Fiat and Opel established a joint venture in 2000 that led to a co-operation on small car platforms and engines – including those used in the Punto and Corsa models. At the time General Motors secured a 10 per cent stake in Fiat. However, this was dissolved following a breakdown in relationship between the two firms.
The chairman of Opel’s works council has gone on record saying that Fiat has failed to layout any strategic partnership plans and is using the proposed takeover as a means of securing financial guarantees from the banking sector. “Fiat has a 14.2 billion Euro (£12.7 billion) debt and liquidity problems,” said Franz.
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