Fiat CEO Sergio Marchionne.
The transatlantic effort to save Opel, General Motor's German auto maker, took another blow this morning with Fiat's refusal to attend a crucial Berlin meeting today aimed at providing Opel with emergency loans.
Fiat's Italian-Canadian CEO, Sergio Marchionne, said he is boycotting the talks because Fiat was not told until Wednesday about "certain key financial factors and data" that he considers essential to formulating a Fiat-Opel merger proposal. In a statement, he called the German government's search for a new Opel owner "complicated and uneven."
Mr. Marchionne, who is in the United States today finalizing plans to take management control of Chrysler, which is soon expected to emerge from Chapter 11 bankruptcy proceedings, said "It is in fact unreasonable to expect, on the basis of prudent business judgment and proper governance of its affairs, that Fiat would provide funds to an organization whose financial details remain unknown to date."
Fiat, he said, has no intention of either providing emergency loans to Opel or improving its offer for the struggling company, the No. 2 German auto maker, after Volkswagen, measured by volume of vehicles sold. He said Fiat has already offered to contribute its auto business, and cash flows, to the proposed Fiat-Opel merger on a debt-free basis. "More cannot be asked."
Nonetheless, he said Fiat is still keen to merger with GM's European business, which is dominated by Opel and includes the Vauxhall brand in Britain. Last year, GM Europe made about 2 million vehicles and had 54,000 employees.
There was no immediate reaction from the German government to the Fiat meeting boycott. The government, led by Chancellor Angela Merkel, is trying to separate Opel from GM, and prop it up with bridge loans, ahead of GM's expected bankruptcy filing by June 1.
Fiat is competing with Canadian auto parts maker Magna International for control of Opel. Union leaders and some German politicians have said they favour Magna's proposal, in the belief it may preserve more German jobs and factories than Fiat's.
Magna and its partner, Russia's Sberbank, have offered to invest some €700-million ($1.08-billion) into the new Opel. It wants some of the investment guaranteed by the Russian state.
While Fiat expects to make about €1-billion this year, it is in a weakened financial state and has vowed to put no new money into either Chrysler or Opel, relying instead of U.S. and German government loans to keep the two auto makers alive while they are restructured.
Eric Reguly