Hope at last ? Fiat to the rescue !

Fiat CEO in Berlin to pitch plan © REUTERS2009 MILAN/BERLIN (Reuters) - Fiat's chief executive visits Berlin on Monday to try to convince Germany's political leaders to sign up to his vision for a new European car giant by letting him take over General Motors's Opel unit.

Sergio Marchionne goes to Berlin with a one-month deadline in his sights, a newspaper report said, less than a week after he sealed a deal with Chrysler to form a partnership. His plan would involve spinning off Fiat's core car business into a new company including Chrysler and GM Europe and listing it on a stock exchange.

"An agreement in principle has to be struck in 30 days," he said in an interview in the Financial Times on Monday about a deal with Opel. Fiat's shares jumped 6.5 percent in early Milan trade while the DJ Stoxx European auto sector rose 1.1 percent. Combining with Chrysler and Opel fits in with Marchionne's strategy for guiding Fiat through the auto industry's current crisis.

He has often said a carmaker had to make more than 5 million vehicles a year to be able to make a profit, and in December he said Fiat did not have the scale to survive the shake-out as a standalone company.

A Fiat statement on Sunday said Fiat, Chrysler and GM Europe would together have annual revenues of about 80 billion euros (71.3 billion pounds). It did not mention Opel, which makes up 80 percent of GM Europe's revenue.

Marchionne told the Financial Times that Fiat and Opel would reap synergies of 1 billion euros a year from the deal. "From an engineering and industrial point of view, this is a marriage made in heaven," he was quoted as saying.

The biggest opposition to a deal between Fiat and Opel will come from the unions in both countries. They fear the eventual cost savings to come out of a merger would lead to job cuts and plant closures. The new company, tentatively called Fiat/Opel, would merge their small B and midsize C segment car platforms, and absorb Fiat's ultra-small A platform and Opel's upper-middle D platform, the Financial Times said.

'OPPORTUNITY FOR EUROPE' Marchionne plans to ask the British government and administrations in other European countries where Fiat and Opel have plants, to offer the new company loan guarantees, the FT said. He will say the deal is important for Europe, currently being battered by an economic downturn, the paper said.

"This is a real opportunity to make the European Union work as a union," he was quoted as saying. "If we don't do this, it's a failure of our efforts to create a single market." The new company would see the Agnelli family's 30 percent shareholding of Fiat Auto diluted after the spin-off, with GM also a minority shareholder in Fiat/Opel, the paper said. The merged company would also include SAAB, GM's small Swedish brand which it is selling separately, the paper said.

The new company may also include GM's Latin American operations, the FT reported. Ferrari and Maserati luxury carmakers would stay with the parent, the paper said. The FT said Marchionne was considering stepping down next year as non-executive vice-chairman of UBS.

German Economy Minister Karl-Theodor zu Guttenberg said he did not expect a final decision on the future of Opel to come out of his meeting with Marchionne on Monday. "Today I just hope that I hear something more concrete than the rough draft that has already been presented to me," he told German radio, adding he was open to any potential investor.

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Well, the 9000 bodyshell was a joint effort with Fiat and made one of the nicest SAABs IMHO.

Graham

Reply to
Eeyore
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The current 1.9 Saab diesel is a Fiat engine also used by Opel, Vauxhall and Alfa Romeo. Fiat originally pioneered the modern common rail diesels.

While FIAT well engineered cars, they haven't had the best interiors to put it mildly. Flimsy fittings which often drop off IME. Facias which warped in the sun light. Creeks and rattles. Parcel shelves with a minds their own. We must hope that Saab insists on standards.

Reply to
johannes

Could be very good news, dealer network will be critical if it is to succeed with the public. I can't imagine the new group wanting to maintain the same total size of dealer network, so we might end up with "mass market" dealerships (Fiat, Vauxhall) and "up market" dealerships (SAAB, Lancia, Alfa perhaps) through a process of culling.

Here in UK, Fiat group have not enjoyed a very good reputation for aftercare although that might be changing now. SAAB dealerships have been an asset to the brand.

Reply to
RCC

That is true. I had both cars; Fiat Croma and now 9000. Fiat dealer was awful. They even bumped my car and wouldn't admit it.

Reply to
johannes

There aren't any Fiat dealerships in the USA anymore. They pulled out years back, sold a few cars under some mixed brand, then disappeared entirely as far as I know.

Fiat's had terrible reliability problems and didn't sell well. I don't know about the rest of the line, but the 850, the 124 Sedan and Spyder, the X19 were all fun but notoriously unreliable. I don't think they sold any other models here.

Perhaps they are thinking of using the Saab dealerships as a way back into the US market.

Reply to
me

Well... FIAT have several brands like Lancia and Alfa Romeo that could fit into a nice niche market. They're a lot better now too and Italian cars have always had a reputation to be fun to drive. I nearly bought an Alfasud Cloverleaf once. That went like it was on rails.

Graham

Reply to
Eeyore

Had a Fiat 132 1800S, a 132 2000 and a Croma CHT. The 132 2000 was the nicest of them, a pity that it rusted so badly.

Reply to
johannes

Lancia went away over here a long time ago (the late 70's maybe?) but I always liked them. I'm not sure about Alfas, but there were being sold here a few years ago. I did spend quite a lot of time working on a few Alfa's including a nice boattail spyder from the late 60's. Terrific little cars - but as the expression goes "when they were running".

Reply to
me

my last company car was an Alfa 156. It was fun to drive, but it wasnt predictable whether you could drive it on a given day.

it was the only one i ever handed back early - just too painful with the frequent services, flaky flappy paddle gearbox, breaking water hose, unreliable electrics.......

the best bit was you could not change gear out of 2nd on 500m of road on my way to work where it is under a 400 kV power line.

Reply to
Stephen

I have been reading this post and responses on this thread which appears that most are coming from those in the UK. Here in the US I can say, as a 6 time alfa offender with a 91 spider still in my garage, that Italian autos left in 1995 with Alfa Romeo, leaving only Ferarri and Maserati to be sold in small numbers. Americans have long memories of Fiats, last sold her in the early 1980s, and they are not good. My 1978 short lived 131 sedan was a prime example. However, that was a lifetime ago and my experience with my last "new" alfa, a 1994

164Q, ranks as one of the best cars I have owned. Those of you in the UK would know better but I believe that there are no longer any "bad cars" as that term was defined decades ago. While consumer expectations have risen hugely in the last 30 years due in large measure to Japanese quality and reliability-and dragging the former big 3 auto makers with them-I must assume that Fiat and its progeny will be able to field a good product line if they ever make it back here. I have been waiting for alfa's return since it left in 1995.

I currently own a 2003 9-5 aero, purchased used in 2006 with low miles and, I must admit, it has been a stellar car from reliablity standpoint. Excitement? Not so much. As someone pointed out in an earlier post, Fiat and Saab collaborated with Lancia and Fiat on the

9000/164 platform in the late 90's and that produced good cars all around. I trust that if Saab enters the Fiat fold the same type of synergy will result. We cannot expect specially built models from small car companies any longer. While some of the character of an individual manufacture will inevitably suffer, enough of the character of each car line should survive to make it a better alternative than losing the marque completely.
Reply to
akushner

Lucas headlight switches had three positions: dim, flicker, and off.

Reply to
me

The swedish head of the European Association of Automotive Suppliers (CLEPA), Lars Holmquist states that it is a very high risk that SAAB is gone in a year. The financial situation for Volvo Personvagnar is much better. Still, because the lack of support from European Investment Bank it is difficult to guess if Volvo will survive.

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snipped-for-privacy@ake-law.com wrote:

Reply to
Balo

And yet another story has GM talking to 10 different potential buyers (read at the end).

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We'll just have to wait and see.

Reply to
me

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