Clash of the Titans: Fiat reportedly squaring off with European Union over mergers
According to The Detroit News, Guenter Verheugen, the European Union's Industry Commissioner, lashed out at Fiat on Friday in a radio interview, voicing concerns that the Italian automaker is acting irresponsibly to be considering new mergers and acquisitions when the company is already in debt. The public tongue-lashing from the EU official sent Fiat CEO Sergio Marchionne to the microphones to defend his position, asserting that the commissioner's "comments are not helpful to the ultimate goal of re-establishing a sound footing on which to build the future of this industry".
Although Fiat lost half a billion dollars in the first quarter of this year and holds a debt of some $8.6 billion, sources suggest that the pending deal with Chrysler would have Fiat providing technology and expertise but no cash in exchange for a 20% stake in the troubled American automaker. Meanwhile, although Fiat Group chairman Luca di Montezemolo denied the company was pursuing any interest in GM's European subsidiary Opel, Marchionne is now asserting that would consider the possibility, but that no offer had been made to date.
[Source: The Detroit News | Image: Andrej Isakovic/AFP/Getty]
Reader Comments (Page 1 of 1)
jamie 2:39PM (4/27/2009)
FIAT is definitely biting off more than it can chew. The proposed merger with Chrysler will undoubtedly turn into another major financial disaster. You can't buy a failing multinational corporation with nothing down, especially if you haven't got any money to ante up either. This marriage is doomed from the start.
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Rick C. 3:59PM (4/27/2009)
Fiat is healthier than this bozo is alluding to. I think it won't be an issue, except if the world economy crashes further.
@ Jamie, I *like* your site. PLEASE tell me you're single.
jamie 4:26PM (4/27/2009)
I am married to my 9-3 topless turbo.
Rick C. 5:03PM (4/27/2009)
Knew it had to be some type of mechanized device....
LOL, sorry, couldn't resist. Cheers.
John 2:47PM (4/27/2009)
Did Fiat accept corporate welfare from the EU? No.
Then the EU needs to close their mouths and let private business take care of their own matters.
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Aprime 3:33PM (4/27/2009)
YEAH BUT THEN WHAT WOULD YOU BE ELECTING THOSE PEOPLE FOR? D:
(lol, socialism)
why not the LS2LS7? 4:11PM (4/27/2009)
I can't find any links right now, but Italy regularly bails out their major industries. Look at Alitalia right now, they've been bailed out 3 times in 3 years or something.
I would be shocked given FIAT's history of sucking if they have not received government funding.
This whole idea of FIAT saving Chrysler is hilarious to me. FIAT is usually circling the drain themselves, they aren't even doing particularly well right now.
Smegley 2:49PM (4/27/2009)
........"voicing concerns that the Italian automaker is acting
........ irresponsibly to be considering new mergers and acquisitions
........ when the company is already in debt."
Maybe this guy needs to speak to our idiot politicians in DC about their same irresponsible actions.
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Luca M 3:07PM (4/27/2009)
The EU has every right to ask questions about a possible deal between Fiat and Opel. In Italy every major company has a big debt. That system works in Italy for many reasons, but should not be allowed to spread to the rest of Europe.
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Derek 3:22PM (4/27/2009)
Does anyone operate debt-free anymore? Or at least set their priority to get out of the debt of initial investment costs ASAP? Seems like all anyone cares about anymore is "cash flow", and are all too happy to leech as much as they can and then jump ship to let someone else deal with the problem.
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AUTOMANIAC 3:51PM (4/27/2009)
Fiat Group isn't only composed by fiat, alfaromeo,maserati, ferrari and lancia.It's a big industrial group, and if fiat lost 440milion euros in the first quarter, the group made 1,7bilion euros profits.Plus the debts are because of the investments and are normal for a big group in the italian finance.In fact it's liquid assets are strong at 4 bilions euros and the society is very healthy.Gunther doesn't know what he is talking about, like most of the politicians.
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AUTOMANIAC 3:57PM (4/27/2009)
doh...euro
why not the LS2LS7? 4:13PM (4/27/2009)
€4B isn't much at all for a company that large. Estimates are Toyota lost double-digit billions of dollars in the last year, GM and Ford did too.
AUTOMANIAC 6:35PM (4/27/2009)
doh...Gunther = Guenter Verheugen
you are right, it isn't.But fiat has a lot of value in terms of know-how,technologies, research, etc.. and still making profits.Opel actually uses fiat engines and its economical situation isn't better than chrysler.So if they want it to survive, they better cut the chat and find a partner, and fiat for me it's a good one.
Frank 3:58PM (4/27/2009)
Sergio Marchionne looks like the new Carlos Ghosn.
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Ivan 6:31AM (4/28/2009)
dinkiću, na kurac te nabijem
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CaMIRO 8:54AM (4/28/2009)
Heh. Odd choice of picture.
The man with Marchionne is Mlađan Dinkić, Serbia's Minister of Economy, photographed following Fiat's take-over of Zastava Automobili (http://www.zastavanacionale.com).
Zastava built Fiat and Fiat-based budget cars, including the Yugo, for 55 years.
It now builds the Fiat Punto II.5.
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Gagilili 3:26AM (4/29/2009)
Samo cekam jednog dana kad podignem dasku WC solje da mi se Dinkic pojavi...
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