A solution appears to be emerging in the bid to find a major investor for beleaguered German carmaker Opel. SPIEGEL has learned that Italian automaker Fiat (FIA.MI) is planning to buy shares in the GM (GM) subsidiary. A letter of intent is expected to be signed next week. However, workers have said they would resist the deal.
Fiat is soon expected to take over General Motors' European operations. Information obtained by Spiegel from sources familiar with the negotiations say that Fiat will sign a letter of intent on Tuesday. Afterwards, the Italian carmaker would obtain a majority stake in the troubled German auto manufacturer Opel.
GM subsidiary Opel is also involved in promising negotiations with autoparts supplier Magna. Opel management and workers would likely greet an investment by Magna because the international parts and components company has a strong reputation in research and development and could complement the German automaker. But executives in Detroit and officials in Germany's Economics Ministry appear to be more interested in a hastier solution with Fiat.
Klaus Franz, who represents the interests of Opel employees on the company's works council, said workers would sharply oppose the investment. He said he feared a "dramatic reduction of jobs at Opel and the closure of plants in Germany." Opel and Fiat's lines of car models, he warned, would completely overlap. In addition, Fiat is highly indebted. Franz said Opel had had negative experiences with Fiat in the past. "We know the bride," he said.
RÃ¼sselsheim, Germany-based Opel had a five-year partnership with Fiat that ended in 2005 after a dispute. General Motors was even forced to pay the Italians $1.5 billion. Works council chief Franz fears that debt-saddled Fiat is merely seeking to take a stake in Opel so that it can get possible credit guarantees from the German government.
Fiat CEO Sergio Marchionne has been urgently seeking a partner for some time now. He believes that with 2.2 million car sales a year, the company's automobile division—which includes Fiat, Alfa Romeo and Lancia—is too small to survive. Opel and Vauxhall sell 1.5 million cars a year in Europe.
Opel is seeking an investor to help make it an independent European publicly traded company that is largely independent of GM, its US parent company. GM would only maintain a minority stake in the new company.
GM must present a new restructuring plan by the end of May in order to obtain further bailout money from Washington. At the same time, it's still possible the company that was once the world's biggest carmaker could go bankrupt.
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