- Waller deemed competent to stand trial (1/11/17)5
- Young Elvis impersonator from Bernie performs on 'Ellen DeGeneres Show' (1/12/17)
- 113 drug tests at Jackson High net one instance of illicit usage (1/11/17)14
- Two subjects of interest in 1992 homicide to take polygraph tests (1/15/17)6
- Two men shot after argument; houses also struck by bullets (1/12/17)21
- Imo's Pizza will be added to Rhodes 101 convenience store in Jackson (1/10/17)16
- Cape SportsPlex contractor offers a look at the project (1/15/17)13
- Juvenile accused of stealing, damaging playground statue (1/9/17)25
- Two Cape men recovering after shooting (1/13/17)
- Business notebook: Faithfully Fed aims for more than just food (1/9/17)4
Fiat CEO aiming to create global auto powerhouse
ROME -- Fiat Group SpA will be on the path to becoming a global automotive powerhouse if Chief Executive Sergio Marchionne has his way.
Marchionne is set to meet Monday in Berlin with German economic and foreign ministers to discuss Fiat's offer for General Motors Europe's German unit, Opel.
Fiat confirmed Sunday that it is in talks to buy most of General Motors Corp.'s European operations. It also said it is evaluating the possible spinoff of its auto business to form the core of a new company.
GM has been trying to find investors for its noncore and unprofitable assets to help stave off collapse. Germany is keen to safeguard the future of Adam Opel GmbH, a core part of GM's European operations, which employs about 25,000 people at four plants in Germany.
Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. In addition, Fiat is in the process of acquiring U.S. automaker Chrysler LLC without putting up any cash.
Marchionne was quoted in the Financial Times on Monday as saying of his company's plan: "From an engineering and industrial point of view, this is a marriage made in heaven."
The new auto company, which according to Fiat would have $105 billion in annual revenue, would put the Italian automaker in markets where it has little or no presence, including North America, traditionally the largest market in the world.
"They're going to be a global powerhouse, I guess. Who would have thought?" asked Erich Merkle, an independent auto industry analyst in Grand Rapids, Mich. "They seem to be on a buying binge right now, looking for cheap and distressed assets like Chrysler and Opel."
Fiat is not Opel's only suitor, however. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a "rough concept for a commitment with Opel."
The German government has said it doesn't foresee giving direct state aid but could help an Opel investor with loan guarantees.
The Chrysler deal, which must still be approved by a U.S. bankruptcy court, would be in exchange for giving Chrysler access to Fiat's small-car and engine technology. Chrysler cars and trucks also would be sold by Fiat through its global distribution network.
The deals would make Fiat a big global player, but that might not be the best thing for the Italian automaker, which might be overreaching with the acquisitions, said Merkle.
"This is a lot to take on, quite honestly," Merkle said. "When you start looking at Chrysler, it'll make them a very large automaker, but we've seen that large isn't necessarily indicative of success."
It will take years, Merkle said, for Fiat to gain any synergies by globalizing design, engineering and manufacturing operations with Chrysler and the GM units.
GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab. Saab may not be included in the deal, however. The company is being reorganized under Swedish law and is likely to be separated from the rest of GM's European operations.
Saab declined to comment on whether Fiat was one of the roughly 10 bidders who have expressed serious interest in the Swedish brand.
Saab spokeswoman Gunilla Gustavs said the sales process is continuing according to plan and that a deal is expected to be signed before the end of June.
"We are now entering a process where we are narrowing down the number of interested bidders. There are around 10 who are more serious, with whom we have held deeper talks and shared more information," she said.
GM also makes and sells small Chevrolet-badged cars in Europe that are designed in South Korea by the company's Daewoo unit, and it's unlikely to sell that because that would be GM's only remaining foothold in Europe, Merkle said.
General Motors has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has received $15.4 billion in aid from the U.S. government to avert collapse.
Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn't foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.
Fiat said that over the next few weeks, Marchionne will be looking "to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company."
"As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe."
In an interview Sunday with Corriere della Sera, Fiat Chairman Luca Cordero di Montezemolo called GM's Opel an "ideal partner" and a possible takeover by Fiat an "extraordinary opportunity."
Fiat, meanwhile, has pressed ahead with a takeover of Chrysler. Chrysler is seeking to sell substantially all of its assets to Fiat, but must gain approval from a New York bankruptcy court.
In addition to Fiat Group Automobiles, the Fiat Group also includes its agricultural vehicles branch CNH and its Iveco trucking unit, as well as a media arm.