TURIN -- Fiat CEO Sergio Marchionne is trying to convince General Motors and the German government that Opel will be better off with his "no-cash, no-debt" deal than a rival proposal that includes a one-time injection of money.
Fiat S.p.A. wants to merge Opel and British sister brand Vauxhall with Fiat Group Automobiles then turn the six-brand automotive group in to a new, publicly listed European company.
Marchionne told German weekly magazine Der Spiegel that the financial benefits generated from the industrial assets of his planned auto group would continue for years. Based on his experience with Fiat, the money that the new company could make would be substantial.
"Last year, our automotive sector generated 2.5 billion euros in EBITDA (earning before interest, taxes, depreciation and amortization)," Marchionne said in an interview published Monday.
The Fiat CEO added that a merged Opel and Fiat would lead to 1 billion to 1.4 billion euros a year in savings, which would further boost the money-making prospects for the combined entity.
A different approach
An offer for Opel from Austrian-Canadian car parts group Magna International includes cash.
Magna said in a May 22 statement that part of its bid is a 700 million euro investment by Magna and Sberbank, Russia's largest lender. Magna wants a portion of the investment guaranteed by the German government.
Der Spiegel also reported Monday that Magna wants the government to at least partially cover some of Opel's 3 billion euros in pension obligations and provide loan guarantees of 4.5 billion euros.
The third bidder for Opel is Belgium-listed industrial holding company RHJ International.
GM and the German government are in a race against time to finalize a sale of Opel. The U.S. government has given GM until June 1 to restructure its operations and prove it can be viable without state aid, or face probable bankruptcy.
GM will decide who gets Opel but the German government will also play a big role in the decision because it would likely supply billions of euros in financing guarantees.
Asked what he would do if Fiat's bid for Opel fails, Marchionne told the magazine: "I will not fall into depression."
He also ruled out trying to final another merger partner in Europe, possibly in France.