Fiat Submits Revised Proposal to Opel

Fiat and more specifically, the company's CEO Sergio Marchionne, insists every once in a while that the Italian manufacturer is the right choice when it comes to Opel's new investor and pointed to a number of reasons to support his statement. But even so, sources close to the negotiations explained that the German government, who is playing a key role in the selling process as it must provide financial support to the new owner, is more pleased with Magna's proposal. But Fiat is far from giving up.

According to a report by the Financial Times, Fiat yesterday submitted a new offer to GM Europe, claiming the company would reduce workforce by only 2,000 employees in Germany. The government has specifically requested the new owner to maintain domestic operations and avoid job cuts as much as possible.

Magna International confirmed in a public statement last week that it wants to takeover Opel. It also revealed that together with Sberbank, the Austrian-Canadian automaker also aims to invest up to 700 million euros. As a reply, Fiat's Sergio Marchionne emphasized that a no-cash offer that would bring more money in the future would be better than a one-time money injection.

"Fiat, on the other hand, is struggling with higher labour costs in Italy and producing in Germany could really help it," an official told the Financial Times commenting on reports pointing to a more advantageous offer coming from Magna. "But either proposal still involves huge risks - not least for the taxpayer."

Nevertheless, we are days away from an official statement as both General Motors, who is facing a deadline of June 1 to decide whether to go in bankruptcy or not, so the German government promised a decision is expected this week.