Fiat boss evokes 'difficult decisions' in Opel takeover

12th May 2009, Comments 0 comments

German and Italian unions are waiting anxiously as the spectre of layoffs and closures loom.

Rome -- The head of Italian automaker Fiat evoked the spectre of job losses on Saturday as he spoke of "difficult decisions" regarding its proposed takeover of Germany's Opel.

"These are difficult decisions, I understand. But it is the moment to make them," the domestic ANSA news agency quoted Sergio Marchionne as saying when asked about layoffs if a takeover goes through.

"What is important is to be completely honest about the problems and how to face them," he added. "If we lose this chance, we will drag these industrial problems into the future."

The governor of the German Rhineland-Palatinate state, Kurt Beck, voiced concern Friday after meeting with Marchionne that Fiat's takeover of Opel would lead to the closure of the Kaiserslautern engine and parts plant.

Italians unions have expressed similar fears after a report this week claimed Fiat plans to slash 18,000 jobs by closing or scaling down 10 factories in Europe if it takes over Opel -- General Motors' German subsidiary.

But Marchionne, who rescued Fiat from the brink of collapse in a few years without massive job cuts, said the company's commitment to the Mirafiori plant in Turin -- its biggest in Italy -- is "unchangeable."

He also said a Fiat-Opel deal is "a very big European challenge," and that "if we succeed in reaching an agreement with the social partners, we will succeed in finding a big answer for Europe."

German Economy Minister Karl-Theodor zu Guttenberg said in an interview published Monday that Berlin was looking for a way to protect Opel if General Motors goes bankrupt.

"It will be about protecting Opel's assets from GM's creditors," he said in Der Spiegel, referring to how Opel can survive GM's restructuring efforts to avoid going bust.

The Economist newsmagazine, citing sources close to Marchionne, reported Friday that if Fiat takes over Opel it would favour slashing production in its factories instead of simply closing them.

Italian unions said Saturday they would meet their German colleagues in Frankfurt on May 13 to discuss the takeover, ANSA said.

Fiat is also set to acquire a major stake in Chrysler once it emerges from bankruptcy protection, meaning it would become one of the world's biggest automotive groups.

Marchionne said that "everything is going as expected with Chrysler" and added that Fiat is exploring other avenues such as GM's Latin American operations.


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