Fiat makes its move on GM

Italian carmaker Fiat has begun efforts to win support for its plan to take over Vauxhall and Opel, part of General Motors' European business, which is under pressure to sell as GM faces potential bankruptcy in the US and has until 1 June to restructure. ┬á Fiat is already trying to take over some of Chrysler, the US carmaker that has applied for bankruptcy protection, and there are some who are unhappy about FiatÔÇÖs latest endeavors to take GM. ┬á Professor David Bailey, from Coventry University's Business School, warned that any deal could cost the jobs of UK car workers. ┬á Tony Woodley, joint general secretary of Unite, the UK's main carworkers' union, said, "This move sends shivers down my spine." ┬á German economy minister Zu Guttenberg had said, after meeting Fiat Group chief executive Sergio Marchionne, that any deal would need short-term financing across Europe by the Italian carmaker of about Ôé¼5-7 billion. ┬á The economy minister described Fiat's plans for Opel - which he said called for "a certain need for consolidation" - as "interesting," but said the German government would need time to assess the viability of a deal before reaching any conclusions. ┬á German union official Armin Schild, who sits on Opel's supervisory board, was skeptical about whether Fiat would be an effective investor. ┬á "I can't say if Mr. Marchionne is able to save Opel, but I know that Opel and Fiat are direct competitors, producing the same types of cars for the same market, so the merger of both companies could offer little to each other and take away a lot," he said. ┬á Some are wary that British jobs could be lost if the deal went ahead.┬á Opel employs nearly 26,000 in Germany, while Vauxhall employs about 5,000 people in the UK, and the UK's Unite union said it opposed Vauxhall being taken over by Fiat - claiming it would be an "unmitigated disaster" that would cost jobs. ┬á "General Motors has indicated they have three plants too many and those three plants too many are actually in Germany, or run by the Germans," he said. ┬á "It could be that Fiat, knowing that the company is too big, would balk at taking on the Germans and might look for the softer option of closing a plant in the UK." ┬á Five years ago, GM paid $2 billion to avoid having to take up an option to buy Fiat's car-making business. There has been some doubt about whether Fiat could cope with such growth.┬á Mr de Montezemolo told Italy's Corriere della Sera newspaper on Sunday that a Fiat takeover of Opel would create "a very strong group." ┬á "They're going to be a global powerhouse, I guess. Who would have thought?" said Erich Merkle, an independent auto industry analyst in Grand Rapids, Michigan. ┬á"It'll make them a very large automaker, but we've seen that large isn't necessarily indicative of success."