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Fiat wants Saab in European car giant

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Fiat wants Saab in European car giant
09:46 CEST+02:00
Swedish car maker Saab could become part of a new European car giant after Fiat CEO Sergio Marchionne expressed an interest in General Motors' European brands.

Fiat has recently signed a cooperation agreement with US firm Chrysler and now plans to turn its sights to General Motors' stable of brands in Europe, according to details emerging from an interview with Marchionne in the Financial Times.

This would mean that Sweden's Saab could join Vauxhall, Opel, Alfa Romeo and Fiat models within the new firm.

"I can not comment these details," Fiat spokesperson Eric Geers told news agency TT.

Annette Hellgren, union representative at Saab Automobile, said on Monday that a merger with Fiat would signal a change of direction for the Trollhättan-based firm. Current policy is for Saab to be able to stand on its own, independent of the the GM concern.

"This line of reasoning is new to us. We have not heard this before, I have to say. We have however heard that Fiat is interested in Opel," Hellgren said implying that there may have been some misunderstanding in the media, or at Fiat.

The ambitious plans for a transatlantic car empire received the approval of stock markets with Fiat stock up six percent in Milan on the first day of trading after the reports emerged.

Fiat CEO Sergio Marchionne told the Financial Times that Fiat, together with Chrysler and German Opel, is set to build a new stock market listed company. He forecast annual sales of up to seven million cars and a turnover of 850billion kronor ($106 billion).

"You always take a risk when investing in something totally new," concluded a chain-smoking Marchionne in Monte Carlo in an interview with the newspaper.

The newspaper also concluded that the portents of history do not bode well for Fiat's plans. International mergers among car makers have historically been loss-making deals with US-European mergers having a particular poor record.

Marchionne is on his way to Berlin to discuss Fiat's plans with the German finance minister Karl-Theodor zu Guttenberg and foreign minister Frank-Walter Steinmeier on Monday.

"From a technical and industrial point of view this is a marriage made in heaven," he said of the plans to merge with Opel.

"Today I hope only to hear something more concrete than the rough ideas that have so far been presented," zu Guttenberg said in a radio interview prior to their meeting.

The merger between Fiat and Opel is projected to save costs of around one billion euro ($1.3 billion). The Financial Times has calculated that the savings will be made at the cost of 9,000 jobs.

Aside from Fiat, the Canadian car parts maker Magna has expressed an interest in Opel which employs 25,000 staff and operates four factories in Germany.

Marchionne has confirmed that he expects to stand down as head of the Fiat concern in 2010.

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