Fiat’s future is not scaleable enough for Opel to consider even a possibility of a joint deal or possible merger. Opel is the European arm of General Motors and is currently run by former VW executive CEO Karl-Thomas Neumann. In a recent interview Neumann said,“The industry needs to improve volumes, scale and utilization, in principle Marchionne is right, the auto industry develops the same things ten times over.”
Fiat CEO, Sergio Marchionne, is effectively looking to off-load Fiat’s on going stagnation onto much broader shoulders. Fiat is slowly treading into trouble, its product lineup isn’t capturing the hearts and minds as it once could.
Marchionne wants to reduce the impact of the Italian unions and modernize what he believes are outdated working practices. Now Marchionne wants to form a consolidation of companies saying current development trends are wasteful and cost billions.
The truth of the matter is Fiat is struggling to compete on a global stage and is seeing its market share decline. Fiat and GM did form an equity based alliance in 2000, the deal shared development costs on components and engines.
However the terms of the deal were ruptured and the two companies parted ways, Fiat had to pay a severance package of $2bn dollars as part of a legal clause to prevent it from being snapped up by GM.
Naturally the two companies have not had good relations ever since, but Marchionne seems keen to renew acquaintances, he recently said “I am absolutely certain that before 2018 there will be a merger,”
Marchionne was unable to give further details but did end by saying “It’s my personal opinion, based on a gut feeling,”.