Fiat Still Pursuing Chrysler and Opel Deals
April 23, 2009
Who isn't Fiat getting friendly with these days? First Fiat was supposed to be Chrysler's savior, now reports say Fiat might take a chunk of Opel off of GM's hands. What's more, Fiat seems to think it can do both at the same time.
"Final terms for this transaction continue to be negotiated with the U.S. Treasury and other relevant stakeholders," Fiat said in a statement about its deal with Chrysler. "If negotiations are concluded successfully, final terms will be set on or before April 30, 2009."
So Fiat is still serious about taking over Chrysler, despite the CAW telling them to take a hike after Fiat demanded Chrysler get its labor costs down. Fiat and Chrysler only have a week left to pull this off, and signs are not pointing to 'yes.' Meanwhile, word has come out that Fiat is also interested in buying up a chunk of Opel. GM's been trying to unload part of its wholly-owned German subsidiary for several months now, offering to even give up a majority stake if someone will take it. Getting Opel back on track, possibly with a new majority stakeholder, is the key to getting Germany to pony-up some loans to help the business through the economic downturn.
Despite the potential conflict of interest involved in Fiat controlling both Chrysler and Opel and questions about Fiat's financial ability to pull this whole thing off, sources say Fiat's going for it. Opel union representative Armin Schild told Reuters today that Fiat is a very strong potential buyer for Opel and that his union, IG Metall, opposes the deal because it doubts Fiat has the finances to make it work. Fiat just posted a first-quarter loss and analysts have doubts about its ability to pay down the 4.8 billion euros in debt that it owes this year.
"Opel cannot survive with two sick parents and a Fiat deal would lead to less autonomy for an Opel Europe rather than more," Schild said.
Another Opel labor representative, Klaus Franz, backed up Schild's statements. He told Automotive News that he also opposes the deal because he feels there is too much product overlap between the brands, which could lead to factory closures and job losses at Opel. German magazine Spiegel also weighed in, reporting that GM was also talking to contract auto manufacturer Magna Steyr about buying Opel, but said that both GM and Germany would prefer a deal with Fiat.
As for GM, Fiat, Opel and Germany, they're not talking. Fiat declined to comment on anything besides its dealings with Chrysler. Fiat' chairman even denied last week that the company is even interested in Opel. Meanwhile, Opel insisted that they're talking to several interested parties, whom they would not name. For now, it seems we'll just have to keep waiting and watching to see which deals actually happen and which don't.