I’ve been reading widely and chatting with a few interesting people about the whole Fiat-GME thing.
Here are some updated thoughts:
If Saab are to be believed, and I think they are, then it seems Saab were totally blindsided by this development with Fiat wanting to include them in a takeover of GM Europe.
If I were Jan-Ake Jonsson, I’d be beating a path to the Swedish government’s door tomorrow. It seems the government were talking with Fiat about this, presumably without Saab’s knowledge, as far back as two weeks ago!
Sweden’s government confirmed on Monday it has had contact with Italy’s Fiat (FIA.MI) regarding General Motors’ (GM.N) struggling Swedish automaker Saab.
“We have had contact with Fiat,” said Hakan Lind, spokesman at the Ministry of Enterprise, Energy and Communications. “The meeting was about Saab.”
Lind said the government had been in contact with Fiat a couple of weeks ago, but said nothing concrete had been decided. He declined to provide any further details.
Most news reports are now confirming that Saab are part of Fiat’s plans. I fail to see why or what difference they’d make.
The biggest concerns are in Germany, and not everyone’s happy about it.
From the Times Online:
The plans by Sergio Marchionne, the chief executive of Fiat, to combine a controlling stake in Chrysler with GM Europe along with Fiat’s own core mass-market car division in a separately listed spin-off were criticised by creditors of the bankrupt Chrysler in New York and by unions in Europe…..
….The CGIL union, the most significant among Fiat’s workforce, joined German labour groups yesterday in opposing Fiat’s proposal to build a supergroup. It is demanding guarantees that Italian plants stay open. Unions in Britain are also opposed to a Fiat takeover of GM Europe, which includes Vauxhall.
So that’s Fiat’s own union, as well as the British unions. What about the German unions, who aren’t known for being peaceful little wallflowers?
IG Metall union official Armin Schild, who sits on Opel’s supervisory board, said on ZDF television that Fiat and Opel “are in the same markets with roughly comparable vehicles.” He added that “these two companies can give each other little, but take a lot away from each other.”
And then there’s Germany’s State economy minister Hendrik Hering:
it (is) “unacceptable if Fiat’s entrance is to be at the expense of an entire Opel facility.”
One of the big stumbling blocks will be that Fiat want to waltz in to GME and take a large chunk of it without running up any debt. They want government loan guarantees to cover operations.
Guttenberg said that “Fiat wants to get into this deal without debts of its own.”
He said the Turin, Italy-based company estimates the short-term financing needs — stemming from GM’s debts and pension obligations — at some euro5-7 billion ($6.6-9.3 billion) Europe-wide, which could be covered by loan guarantees from various governments.
He’s managed to do a similar thing with Chrysler in the US, buying in with promises but without spending any money.
I’m not so sure Europe will let him do this so easily, though.
And on that Chrysler link, the one body we haven’t heard anything from on this is the US government, who have helped broker a deal that gives Fiat a whole lot for no outlay. wouldn’t they be expecting Fiat to concentrate on their new American arm?
Marchionne went over to Berlin to speak with German authorities and try to convince them that his way was the best way.
The man he had to try and convince, Germany’s economy minister, Karl-Theodor zu Guttenberg, sounded less than enthused:
Fiat’s plans to take over General Motors’ European operations to create the world’s second-biggest car manufacturer will involve plant closures and substantial job losses, Germany’s economy minister, Karl-Theodor zu Guttenberg, warned today.
Speaking after a meeting with Fiat’s boss, Sergio Marchionne, in Berlin this afternoon, Guttenberg described the Italian group’s plans to take control of Opel, the German subsidiary of General Motors, as “interesting”.
Anyone else get the feeling that 2007/08’s candidate for world automotive domination, Carlos Ghosn, is watching all this with a thin smile?
“Let them play keystone cops” he’s probably saying, “and I’ll swoop in and pick up the pieces when they’ve worn themselves out”
The whole Fiat thing will rely on synergies Marchionne believes can deliver him cost savings in the future.
Read: platform sharing on a massive scale.
Now, platform sharing is going to be a necessary part of everyone’s automotive future, but read Automotive News’ prognostications of how it will look and it’s enough to make your head spin.
A shared lower-medium architecture would be a priority for a future Fiat-Opel deal.
Fiat has its C-Evo architecture, which was developed for the Alfa Romeo Milano. The Milano will replace the 147 next year. This could be possibly be offered to Saab but will not become the lower-medium volume architecture of the proposed alliance.
Most likely, Fiat will switch for its volume models to the platform Opel has developed for the next generation Astra….Fiat and Opel could aim for production of 1 million units also in the minicar segment, but this will take longer.
Fiat last year built more than 450,000 units of its 500 and Panda minicars. But Opel has just replaced the Agila minicar with another model based on a platform from Suzuki. This would delay a convergence until the middle of the next decade.
The eventual convergence could happen on the new generation of the Fiat A-architecture. This is due to debut in 2011 with the replacement for the Panda.
And that’s just the start of it.
This looks like GM all over again, just with a different accent and a better suit.
Not for me. Not for Saab.