Italian carmaker Fiat is considering another tilt at Opel, the General Motors subsidiary that includes UK-based Vauxhall, according to an Italian press report. The resurgent auto giant talked about involving Opel when it was pursuing its tie-up with Chrysler, but nothing came of it. Now, with GM supposedly less than keen on Opel’s current batch of suitors, La Repubblica reckons Fiat is keen to re-visit the idea. And if their rationale is anything to go by, that might turn out to be good news for Vauxhall staff in Luton and Ellesmere Port…
GM was widely expected to flog Opel (and thus Vauxhall) to Canadian car parts maker Magna, not least because it was the preferred bidder of the German government. However, GM now seems to have gone cold on the idea – reports suggest that the recent up-tick in car sales has persuaded it to consider hanging on to Vauxhall/ Opel until the world economy improves, particularly since national governments (including ours) will presumably be willing to put their hands in their pockets if it prevents jobs being lost overseas.
The obvious assumption was that this ‘leak’ was just a way of getting Magna to bump its price up – but according to the Italian press, Fiat is also pretty sceptical about the nuts and bolts of the Magna offer, arguing that its plan is purely about financial engineering and has little or no industrial merit. Now that it’s ramped up its production capacity through the tie-up with Chrysler – and, presumably, developed a taste for knackered US carmakers – Fiat obviously thinks it’s a more natural home for Vauxhall/ Opel. And since the Italian company specialises in small cars, the likes of the Corsa and Agila might actually fit into the stable pretty well (even though they might not meet Italian-style standards – and the less said about the Zafira the better). Although some have speculated that for a new industry owner trying to find economies of scale, the Luton factory is the softest closure target...
Any deal still sounds like a long shot, but it’s nonetheless a statement of intent from Fiat, which increasingly looks like being one of the few big winners from the industry’s current shake-out. On the whole, most carmakers still appear to be feeling the strain – only today, Japanese auto giant Toyota said it was suspending production for over a year at one of its Japanese plants, and admitted it was considering doing the same at its UK plant in Derbyshire (which employs over 4,000 people). Most firms are desperately trying to cut production, so it’d be a pretty bullish move by Fiat to boost its capacity even further now...
In today's bulletin:
WPP adds to gloom as profits halve
Fiat may buy Vauxhall - as Toyota scales back
Editor's blog: Watch out for Nimbys on high-speed track
Millions delay retirement as pensions nose-dive
Coffee eases strain as recession lengthens daily grind