Why Fiat may lose GM Europe bid
TEXT OF STORY
Steve Chiotakis: Now Fiat’s playing a little hard to get in another matter. They’re not showing up today for a meeting about the future of GM in Europe. And while the Italian carmaker says it’s still interested in the operation there, it claims the German government is making unreasonable financial demands. Our man in Europe, Stephen Beard, reports.
Stephen Beard: Today’s meeting in Berlin is supposed to settle a key issue: which of the companies bidding for GM Europe does the German government prefer?
The German government has a key role in this: it’s offering billions of dollars of state aid to whichever company wins control.
There are now only two bidders in the running: Fiat and the Canadian car parts maker Magna. But Fiat says it’s fed up with the government demanding that Fiat pump in more of its own money.
Analyst David Bailey says this seems to clear the way for Magna:
David Bailey: It looks increasingly as though Magna is going to be the preferred bidder, I think, both because Fiat are not going to the talks today and because Magna actually sweetened their deal this week. So Magna’s been trying to do everything possible to please the German government.
The German government demanded more cash from the bidders after the U.S. suddenly announced this week that it was cutting its aid to GM Europe by $400 million. Bailey says with the parent company headed towards chapter 11, the U.S. seems intent on keeping American taxpayer’s money in America.
In London, this is Stephen Beard for Marketplace.
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