2nd UPDATE:Fiat Plans To Enter Alliance Debt-Free -German Min
04 Mai 2009 - 4:31PM
Dow Jones News
German Economics Minister Karl-Theodor zu Guttenberg said Monday
after a meeting with Fiat SpA's (F.MI) Chief Executive Sergio
Marchionne the Italian automaker wants to forge a global car
alliance and plans to enter this new company free of debt.
Zu Guttenberg told reporters that Marchionne sees the need for
consolidation if Fiat was to buy General Motors Corp.'s (GM) German
unit Opel, adding that the brand's German assembly plants and
German headquarters would be kept.
He said Opel's German components plant in Kaiserslautern and
possibly other GM locations in Europe could be "affected" by a
consolidation, without providing a specific figure on how many jobs
would be at risk under Fiat's plan.
Zu Guttenberg said according to Fiat's estimates the overall
need for bridge-financing for its planned alliance with GM Europe
is between EUR5 billion and EUR7 billion.
German labor unions and several politicians oppose a possible
Opel takeover by Fiat amid concerns over wide-ranging cutbacks.
Analysts welcome the potential synergies to be created between Fiat
and Opel but some remain wary about Fiat's financing as the Italian
automaker is squeezed by a large debt burden.
"Given the loss-making status of all three parts of the
combination, the new auto business will need cash injections to be
viable," said Sanford Bernstein analyst Max Warburton in a note,
adding that Fiat's auto operations are loss-making when taking out
Brazil.
Austrian-Canadian auto parts supplier Magna International Inc.
(MGA) has also voiced interest in Opel, but the company so far
provided little details on any possible investment.
Zu Guttenberg described the meeting with Fiat CEO Marchionne as
"interesting" and pledged to examine Fiat's plan closely. He added
that Magna's offer will be examined closely as well.
Zu Guttenberg said GM has allowed potential investors to look at
information on its European operations. But he noted that in recent
weeks GM "hasn't always been the easiest partner to work with"
because not all required data has been made available. He stressed
that any future deal for Opel also depends on a possible bankruptcy
filing of its parent company.
On Sunday, Fiat announced plans to create a new global car giant
comprising GM's European operations, its own auto unit as well as
its interest in troubled U.S. automaker Chrysler LLC.
Web site: www.bmwi.de
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512;
christoph.rauwald@dowjones.com