24 de abril de 2009

"FIAT Wants to Buy Opel, the General Motors´s division in Europe"

Aiming to benefit from Detroit’s problems and vault itself into the top tier of the car industry, the Italian automaker Fiat is eyeing a major stake in General Motors’ Opel division in Europe, even as it simultaneously nears a deal to save Chrysler. Fiat’s chief executive, Sergio Marchionne, already in Washington for talks on the Chrysler deal, has raised the possibility of also acquiring Opel in talks with United States officials, a top government negotiator said Thursday.

Executives said Fiat had discussed Opel with G.M., as well as officials of the German government, which would play a key role in financing any merger between Opel and Fiat. Such a deal, while far from certain, could turn Mr. Marchionne, a lawyer by training, into one of the most prominent auto executives in the world. It would also transform the landscape of an industry now beset by pessimism and doubt.

Fiat is seeking 20 percent of Chrysler, rather than a majority, but almost any arrangement would give it effective control. If Fiat, Chrysler and Opel were all under one roof, the combined company would rank among the top three automakers in the world, behind Toyota Motor and G.M. Today, Chrysler, Fiat and Opel churn out nearly seven million cars annually, though any combination would probably lead to consolidation and the elimination of at least a few factories.

Magna International, a diversified Canadian auto parts company, is also considering a deal for Opel, a German official said. “There are, in contrast to earlier assertions, interested private investors, and a number of them at that,” said Roland Koch, the premier of the German state of Hesse, where Opel has its headquarters. “It is a good thing for the future of Opel that there is competition for the company. Magna and Fiat are two of the possible partners. But it is clear that there are no decisions yet.”

The competition for the automaker represents an abrupt change from just a few weeks ago, when it appeared that there were no parties interested in G.M.’s European operations and that the German government might have to take it over itself or give it away. “It’s a tall order to combine three companies at the same time, but if anyone can do it, Marchionne can,” said David Arnold of Credit Suisse. But underscoring the weakness of the industry, Credit Suisse reiterated its “sell” rating on Fiat shares Thursday.

“We still have concerns ahead of any final confirmation of a deal,” he said. “Along with the grandiose plans, Fiat has 6.6 billion euros in net debt.” That debt is the equivalent of $8.6 billion. A merger with Opel would substantially improve Fiat’s sales mix in Europe. While Opel is strong in Germany and Britain, Fiat is concentrated in Southern Europe, Philippe Houchois of UBS in London noted.

During a conference call with analysts Thursday afternoon, Mr. Marchionne said he had not had direct talks with Opel, adding, “Chrysler is my first and foremost objective.” Mr. Marchionne has long argued that number of auto companies needs to shrink, and that without addressing the overcapacity in the industry, consistent profits will be difficult to achieve for most carmakers. He has said that a car company needs to make at least five million vehicles a year, with one million units on each car platform, to succeed.

“We need to go back to making cars and making money making cars,” Mr. Marchionne said Thursday. “This is an incredibly poor industry, and we have not earned our cost of capital. We have caused enormous damage by the moves we made.” An edge of anger creeping into his voice, he said he was not aiming to create a new industrial empire, as some analysts have suggested, but rather create a profitable template for the industry. “The obligation is on all of us not to do stupid things,” he said.

But many analysts doubt that Mr. Marchionne can pull off such a three-way deal, despite his success at reviving Fiat’s fortunes since he took over there five years ago. Michael Tyndall, an auto specialist at Nomura International in London, said that while the industrial logic for such a combination was strong, Fiat faced huge political obstacles in Germany. “Closing factories requires firing people,” Mr. Tyndall said. “I can’t see the German government, particularly in an election year, financing a deal that would require jobs to be cut.”

Mr. Tyndall said it was possible that Mr. Marchionne, who has not been shy about negotiating through the press, was simply engaging in brinksmanship with Chrysler stakeholders. “Fiat’s hand in the negotiations is clearly strengthened if it has a ‘Plan B,’ ” he said. Opel union leaders and some German government officials oppose any deal with Fiat, because they fear that an alliance would result in more job losses than would a takeover by Magna. “We reject Fiat taking a stake in Opel,” Armin Schild, a union leader and member of the Opel board, told Reuters. “Labor will not make any contributions should an agreement with Fiat be reached.”

Nelson Silveira, a spokesman in Zurich for G.M. Europe, said that “General Motors has reached out to several investors for Opel” but that “we will not comment on any speculation about who is being engaged.” He said that G.M. was open to selling either a minority or majority stake, but that G.M. would retain an interest in the company.

Separately on Thursday, G.M. said it would idle 13 assembly plants in North America to reduce production by 190,000 vehicles from May through July. The White House has set an April 30 deadline for labor leaders, lenders, Chrysler executives and Fiat to reach an agreement on concessions, if Chrysler is to receive an additional $6 billion in loans to prevent it from going into bankruptcy.

If Fiat were able to engineer a deal with Opel, it would make it the second-largest automaker in Europe, behind Volkswagen, up from its current sixth-place status. Max Warburton, an analyst with Bernstein Research in London, estimated that merging with Opel could save Fiat 1.5 billion euros from shared product development, even before other steps like plant closures or layoffs.

But in a sign that even Fiat is suffering from the overall industry’s problem’s, the company reported a net loss for the first quarter of 2009 of 411 million euros, compared with a profit of 427 million euros a year earlier. Revenue fell 25 percent, to 11.3 billion euros, with volume “declining across all businesses.”

Magna International, based in Aurora, Canada, owns Magna Steyr, based in Graz, Austria. A spokeswoman for the company in Troy, Mich., Tracy Fuerst, said it was the company’s policy “not to comment on speculation.”

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