ROME – Fiat Group SpA will be on the path to becoming a global automotive powerhouse if Chief Executive Sergio Marchionne has his way.

Marchionne is set to meet Monday in Berlin with German economic and foreign ministers to discuss Fiat’s offer for General Motors Europe’s German unit, Opel.

Fiat confirmed Sunday that it is in talks to buy most of General Motors Corp.’s European operations. It also said it is evaluating the possible spinoff of its auto business to form the core of a new company.

GM has been trying to find investors for its noncore and unprofitable assets to help stave off collapse. Germany is keen to safeguard the future of Adam Opel GmbH, a core part of GM’s European operations, which employs about 25,000 people at four plants in Germany.

Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. In addition, Fiat is in the process of acquiring U.S. automaker Chrysler LLC without putting up any cash.

Marchionne was quoted in the Financial Times on Monday as saying of his company’s plan: “From an engineering and industrial point of view, this is a marriage made in heaven.”

The new auto company, which according to Fiat would have $105 billion in annual revenue, would put the Italian automaker in markets where it has little or no presence, including North America, traditionally the largest market in the world.

“They’re going to be a global powerhouse, I guess. Who would have thought?” asked Erich Merkle, an independent auto industry analyst in Grand Rapids, Mich. “They seem to be on a buying binge right now, looking for cheap and distressed assets like Chrysler and Opel.”

Fiat is not Opel’s only suitor, however. Last week, Canadian car parts maker Magna International Inc. presented German Economy Minister Karl-Theodor zu Guttenberg with what the minister called a “rough concept for a commitment with Opel.”

The German government has said it doesn’t foresee giving direct state aid but could help an Opel investor with loan guarantees.

The Chrysler deal, which must still be approved by a U.S. bankruptcy court, would be in exchange for giving Chrysler access to Fiat’s small-car and engine technology. Chrysler cars and trucks also would be sold by Fiat through its global distribution network.

The deals would make Fiat a big global player, but that might not be the best thing for the Italian automaker, which might be overreaching with the acquisitions, said Merkle.

“This is a lot to take on, quite honestly,” Merkle said. “When you start looking at Chrysler, it’ll make them a very large automaker, but we’ve seen that large isn’t necessarily indicative of success.”

It will take years, Merkle said, for Fiat to gain any synergies by globalizing design, engineering and manufacturing operations with Chrysler and the GM units.

GM Europe also includes the British company Vauxhall and the Swedish carmaker Saab. Saab may not be included in the deal, however. The company is being reorganized under Swedish law and is likely to be separated from the rest of GM’s European operations.

Saab declined to comment on whether Fiat was one of the roughly 10 bidders who have expressed serious interest in the Swedish brand.

Saab spokeswoman Gunilla Gustavs said the sales process is continuing according to plan and that a deal is expected to be signed before the end of June.

“We are now entering a process where we are narrowing down the number of interested bidders. There are around 10 who are more serious, with whom we have held deeper talks and shared more information,” she said.

GM also makes and sells small Chevrolet-badged cars in Europe that are designed in South Korea by the company’s Daewoo unit, and it’s unlikely to sell that because that would be GM’s only remaining foothold in Europe, Merkle said.

General Motors has been trying to find investors for its noncore and unprofitable assets as part of a restructuring in which it has received $15.4 billion in aid from the U.S. government to avert collapse.

Opel has said it needs $4.3 billion to get through the economic crisis. The German government has said it doesn’t foresee giving direct state aid. Chancellor Angela Merkel has suggested the government could help an Opel investor with loan guarantees.

Fiat said that over the next few weeks, Marchionne will be looking “to assess the viability of a merger of the activities of Fiat Group Automobiles (including the interest in Chrysler) and General Motors Europe into a new company.”

“As part of this process, the group would evaluate several corporate structures, including the potential spinoff of Fiat Group Automobiles and the subsequent listing of a new company which combines those activities with the activities of General Motors Europe.”

Courtesy: Associated Press

In the wake of Monday’s deadline set by the Obama administration for Chrysler and GM revitalization, GM CEO Rick Wagoner has been asked to step down by President Obama in an effort to bring in new, younger blood to the struggling Detroit powerhouse. After 31 years of dedicated service, Wagoner ends his career at GM with the company at its lowest point and leaves Bush-like legacy to the company, having run it into major distress. No official announcement has been made but the Associated Press has reported that COO Fritz Henderson would be next in line to take office at the Renaissance Center in Detroit. More information to come.

WASHINGTON – The chief executive of Fiat Group SpA told the Obama administration Thursday that the Italian automaker could revive Chrysler LLC and help it repay billions in government loans.

Fiat CEO Sergio Marchionne said the administration’s auto task force was receptive to a proposed partnership that would give Fiat a 35 percent stake in the struggling U.S. automaker in exchange for new technology but no cash.

“We can add value,” Marchionne told reporters after the 2 1/2-hour meeting with the auto panel at the Treasury Department. “That’s the real issue and it’s a necessary ingredient of the revival of Chrysler.”

Fiat made its presentation in advance of the panel’s meeting with bondholders of General Motors Corp. later Thursday. GM is holding negotiations with its bondholders to cut two-thirds of its $27 billion in unsecured debt under the terms of a loan agreement with the government.

General Motors and Chrysler have received $17.4 billion in federal loans and requested an additional $21.6 billion last month. The government is trying to revamp the companies by March 31 and has been meeting with stakeholders as it tries to find a way to resurrect the companies.

Chrysler contends the alliance with Fiat would help both auto manufacturers. Fiat could provide Chrysler with a broad array of fuel-efficient small and mid-size cars, something the Auburn Hills, Mich.-based company lacks, and give Chrysler access to foreign markets.

Fiat’s Marchionne has been seeking a U.S. partner to bring Fiat’s successful update of the 500 subcompact and its sporty Alfa Romeo brand to the United States.

Fiat met with Steve Rattner and Ron Bloom, top advisers to Treasury Secretary Timothy Geithner, and other government officials. Marchionne said the panel “wanted to know what the industrial alliance will look like and what it will look like after we’re finished.”

“I think they were intelligently critical of all things that were relevant … and rightly so. They’re looking at taxpayers’ funding,” he said. “They recognize the magnitude of the problem and there is an absolute determination to find a solution.”

Some members of Congress have questioned whether the government should save a company with a significant foreign stake in a major U.S. automaker. Marchionne said “nothing is going to be taken out of the U.S. and the main objective is to repay every single dollar of taxpayer funding before anyone gets anything.”

Tesla CEO Elon Musk is being battered with plenty of controversy this week as he is in the middle of what many would call “a critical point” in Tesla’s future. Once reports surfaced that employees of the hybrid sports car company were leaking vital information to the press, Musk took it upon himself to filter out the mole. He was recently accused of sending an “entrapment” style email that would slightly differ from email to email based on the person he was sending it to.

The scheme was designed to pinpoint the mole by seeing which email would eventually be released to the press but the plan had one crucial flaw, he did not mention a thing to the rest of his executives. General counsel Craig Harding mistakingly sent out the memo with some additions, voiding Musk’s initial plan and leaving the company in a realm of mistrust. Tuned attempted to speak with Tesla but no one was available for further comment.

After having canceled their Formula One team from their Motorsports division, Honda as decided to pull the plug on the much anticipated NSX successor. At his end of the year speech, Honda CEO Takeo Fukui spoke of the cancellation of the F1 program, the cancellation of the Acura Marketing Plan for Japan and finally, the end of the NSX development. This shocking news goes hand in hand with the profit margins that Honda is forecasting for 2008, which is the mere sum of $2 billion, down 83% from 2007.

Honda is now looking into more efficient technologies such as larger hybrid lineups, diesel technology and fully electric vehicles.

Photo courtesy of Acura