Fiat/Chrysler CEO Sergio Marchionne casts longing eyes at GM’s palsied German daughter Opel, still, or again. Fiat was interested in taking Opel off GM’s trembling hands in 2009. Fiat is ready again, says the Italian business daily Il Sole 24 Ore, if Fiat gets a similar deal as with Chrysler: Opel for nothing, preferably with a cash sweetener.
Says the paper:
“The idea of the Italian-Canadian manager is to get Opel at virtually no cost, not unlike what happened with the first installment of Chrysler, and not unlike its proposal for Opel in 2009.”
Influential analysts urge GM to get rid of Opel which lost $16 billion since 1999. Morgan Stanley analyst Adam Jonas said that GM would need to spend up to $13 billion to convince a buyer to take the hot potato, and to fund Opel’s pension obligations. Marchionne is painfully aware of what it costs to restructure an ailing company in Europe.
For the deal to work, GM would have to dissolve its alliance with French PSA Peugeot Citroen, which is said to be on the rocks anyway. Fiat’s losses in Europe are offset by profits from the U.S , where Fiat “controls Chrysler, giving it a huge cash pile that could be used for acquisitions,” says Reuters,
Il Sole 24 Ore says the deal would be complicated. GM may not want to strengthen its rival Chrysler, where Opel technology would surely end up. Managing two ailing brands, Fiat and Opel, also would be a challenge.
Steve Girksy, chief of Opel’s supervisory board, says his company is not for sale. “GM fully stands behind Opel. Opel is a fully integrated part of GM’s global footprint and vital for GM’s future success in Europe. The GM-PSA alliance is fully on track,” Girsky said in an emailed statement. What else should he say.