A radical overhaul of the European car industry could be closer after the boss of Italy’s Fiat met top German politicians about a merger with Opel.
Sergio Marchionne hopes to create Europe’s biggest car maker by combining Fiat with Germany’s Opel and Britain’s Vauxhall, currently owned by struggling General Motors. Marchionne would also add to the mix in elements of another ailing US company Chrysler with which he has just formed a partnership. After they met, Germany’s Economy Minister Karl-Theodor zu Guttenberg said Marchionne’s plan is “interesting.” But he added needs GM’s blessing first: “I hope Fiat’s talks with General Motors are advanced because both interested parties (Fiat and Austrian-Canadian car parts maker Magna) have made their presentations to us and will first need to reach an agreement with General Motors.” The German government – facing an election in September – is keen to save jobs at Opel and avoid plant closures. For its part Fiat would need five to seven billion euros in government financial support. And Armin Schild, regional leader of the IG Metall union is not convinced it could work: “Opel and Fiat are direct competitors, they compete with similar models in similar markets. Therefore, there’s not a lot that is complementary between the two companies.” If the Fiat plan becomes reality, the combined group would be the world’s second-biggest car manufacturer with sales of six to seven million vehicles a year and 80 billion euros in revenues.