Fiat's bid for GM Europe threatens Italy, U.K. factories, says labor boss
FRANKFURT (Reuters) -- The senior labor leader of General Motors' Opel unit, Klaus Franz, said Fiat's proposed takeover of GM's European business will lead to factory closures in England and Italy.
After a meeting on Monday with Fiat CEO Sergio Marchionne, Franz said Marchionne's plans foresee the loss of some 9,000 to 10,000 jobs at the combined European operations of Fiat and GM Europe.
Contrary to Marchionne's comments in public, Franz said the Fiat boss told him that Opel's Kaiserslautern engine plant would have to be closed along with other Fiat/Opel manufacturing sites in England and Italy.
Opel's sister brand Vauxhall has factories in Ellesmere Port and Luton, England. Fiat has eight plants in Italy.
"In my opinion (Marchionne) is risking everything," Franz said. "He wants to build a global carmaker financed with German and American taxpayer money."
Franz is a member of Opel's supervisory board and the carmaker's works council chairman.
German Economic Minister Karl-Theodor zu Guttenberg on Monday said that Fiat would need loan guarantees of 5 billion to 7 billion euros from European governments to cover GM Europe's unfunded pension liabilities and debts.
Fiat already has net industrial debt of 6.6 billion euros ($7.94 billion).
Last week, Fiat agreed to take an initial 20 percent stake Chrysler for no cash and only offering the bankrupt U.S. carmaker payment in kind by sharing its small-car technology.
Global ambitions
Franz said Marchionne was driven by the ambition to create a global automotive group that would be No. 2 in the industry in terms of sales volume after Toyota.
"The deal with General Motors only makes sense for Marchionne if he can get its Latin American business as well, which he wants GM to bring into the new company," he said.
Franz said Fiat could beef up its Brazilian business, which most analysts believe is its most profitable.
Franz also criticized Fiat's plans to significantly undervalue and dilute the Opel brand and added that Marchionne was mainly interested in gaining access to GM's compact and mid-sized global architectures on which Opel builds its Astra and Insignia models.
These so-called 'federalized' platforms allow any investor to manufacture small cars adapted to fulfill U.S. requirements, which is something that Fiat's partner Chrysler cannot offer with its focus on minivans, SUVs and large pickups.
Franz said he remained open to further negotiations with Marchionne, reaffirming he was not hostile toward Fiat's approach, but added that a second meeting was not arranged.
Franz is a veteran labor leader who has become the public face of Opel. He represents the interests of the 50,000 Opel workers across Europe and any deal between GM and Fiat over GM's European business would likely require his support.
