Fiat poised in GM Europe takeover
Fresh from agreeing to take over a large chunk of Chrysler, Fiat now wants GM's European divisions as well. The automaker meets today with the German government about a takeover, and Stephen Beard reports the German government may agree.
The logo of Opel, a German subsidiary of U.S. carmaker General Motors (Nicholas Ratzenboeck/AFP/Getty Images)
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TEXT OF STORY
Steve Chiotakis: Last week, we got word that Chrysler and Italy's Fiat would be joining hands in the quest to make small, fuel-efficient cars here in the United States. Now, Fiat's CEO is talking with the German government today about taking over General Motors' Opel unit there. All part of a plan to turn itself into one of the world's top three automakers. More from our man in London, Stephen Beard.
Stephen Beard: The plan is extraordinarily bold. Fresh from agreeing to take over a large chunk of Chrysler, Fiat now wants GM's European divisions as well. That's Opel in Germany, Vauxhall in Britain and also, perhaps, the Swedish company SAAB.
The combined group would have car sales of between $6 [million] and $7 million a year. That would put Fiat on a par with Volkswagen, just behind Toyota.
Fiat's first hurdle comes this afternoon. The company will seek clearance from the German government to take over GM's Opel.
Chris Brady of the BPP Business School thinks the German government will agree:
Chris Brady: They're not going to allow any state aid to go in. And rather than let the company go under, my view is that they'll allow this to happen.
There's a certain irony here. Five years ago, GM paid Fiat $2 billion as a penalty for not buying the Italian car business. Fiat used that money to turn itself around.
In London, this is Stephen Beard for Marketplace.
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