The future of Europe’s small car production could be re-drawn today as the boss of Fiat travels to Berlin for talks with the German government. It is thought that Chief Executive Sergio Marchionne wants to create a new European car giant. His idea is to spin off Fiat’s core cars division and join it with Chrysler, which Fiat is in the process of buying, and add Opel – the German arm of General Motors.
The resulting super company would have revenue worth about €80bn and sales of six to seven million vehicles a year – behind Toyota but more than Renault/Nissan or Ford. General Motors is prepared to offload Opel as part of its restructuring plans to avoid collapse in the US.
But while industry-watchers admit Chrysler and Fiat could complement each other with their differing lines, it is not clear where Opel would fit in. And that is worrying workers at the Opel plants in Germany. Their small cars are similar to those produced by Fiat, raising fears that a Fiat takeover will mean job cuts and some models axed for good. Opel workers are consequently backing a rival bid from the Austrian car parts maker, Magna. The German government, which is mindful of rising unemployment is considering Magna’s proposals as they include a serious commitment to Opel.