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  SPIEGEL Interview with Fiat CEO Sergio Marchionne: 'If Opel Doesn't Want Us, I Won't Get Depressed'

SPIEGEL Interview with Fiat CEO Sergio Marchionne 'If Opel Doesn't Want Us, I Won't Get Depressed'

Part 2: 'I Don't Beg'

SPIEGEL: Do you need German taxpayer money to pay off the Fiat Group's old debts?

Marchionne: No. We are going into this with Fiat Auto, which is debt-free. Our basis is clear: no cash, no debt.

SPIEGEL: You don't want to pay a single euro for Opel, but in return you are not contributing any new debt?

Marchionne: Yes. Our business will provide cash immediately, and that's more important than a significant lump-sum payment, because it will be sustainable. In 2008, our car business brought in more than €2.5 billion ($3.5 billion) in EBITDA -- earnings before interest, taxes, depreciation and amortization -- which will help finance the joint operating business of Fiat and Opel. We also expect to see synergistic effects of between €1 billion ($1.4 billion) and €1.4 billion ($1.96 billion). Fiat was just hired three major financial institutions to develop a strategy for the new group, so as to separate the auto business from the Fiat Group as efficiently as possible.

SPIEGEL: Your logic is that of mass production. But perhaps that isn't the logic Opel needs at all. The Canadian-Austrian Magna Group, for example, would not contribute any auto production of its own to a merger. Instead, it will open up the enormous Russian market for Opel. Couldn't that be more profitable?

Marchionne: Magna acts as if it had discovered Russia. But we probably know the market there better than they do. Fiat has joint ventures in Russia. Five years ago, we took a look at the factories of Magna's Russian partner Gaz. It wasn't right for us. The Russian auto industry needs to solve its own problems first. You have to learn to walk before you can run. Moreover, the Russian auto market has declined by more than half in the last six months. They couldn't take on Opel's inventory without jeopardizing the domestic industry. If one of my people came to me with such a plan, he would be out of a job the next day.

SPIEGEL: A partnership with Magna could make it easier to export to Russia.

Marchionne: Anyone can export there.

SPIEGEL: There are protectionist hurdles …

Marchionne: … mainly if you want to produce there. Perhaps that would be easier with Magna. But what good does it do German workers if they produce in Russia?

SPIEGEL: What new markets could there be for Fiat-Opel?

Marchionne: Aside from the markets where Fiat and Opel already have a presence today, there is Latin America, Turkey, India, Russia and China -- all growth markets where we already have stable relationships today.

SPIEGEL: Why are the German unions so enamored of Magna?

Marchionne: It's wishful thinking, because Magna plans to cut 10,000 jobs at Opel, which is more than Fiat would cut. They believe that the Magna plan would not lead to cuts in production. That's what they hope. But I'm afraid that they are deluding themselves -- very much so, unfortunately.

SPIEGEL: The people at Opel are also skeptical about you because the two companies' model ranges and customer bases are similar.

Marchionne: They are not the same customers. Someone who buys an Opel doesn't want a Fiat, and vice versa. An Opel is an Opel, a German brand. It will remain that way.

SPIEGEL: What would Fiat bring into the marriage? It certainly won't be money.

Marchionne: We would contribute the entire production process, that is, everything with which Fiat Auto is now making money. That amounted to a cash flow of just under €3 billion ($4.2 billion) last year. On Wednesday, we submitted our 10-page proposal, on time. It's an honest industrial project which aims at solving a problem. If Opel doesn't want us, I won't get depressed over it. I don't beg.

SPIEGEL: Would you look for another European partner, perhaps in France?

Marchionne: No. Even if Opel doesn't want us, the Opel saga will continue for a while. Then it will be up to the market to solve the problem. But I don't want to be part of that.

SPIEGEL: Would it be easier if there weren't a parliamentary election in Germany this fall?

Marchionne: Of course. And I'd also like to live in an ideal world, where I would sit at a table with reasonable people and make reasonable decisions.

SPIEGEL: When you were in Germany, did you feel that our politicians understood you?

Marchionne: I met with (Economy Minister Karl-Theodor) zu Guttenberg, (Foreign Minister Frank-Walter) Steinmeier, (Rhineland-Palatinate Governor Kurt) Beck, (Hesse Governor Roland) Koch and (North Rhine-Westphalia Governor Jürgen) Rüttgers. And (Thuringia Governor Dieter) Althaus's staff. Everyone asked the right questions. It's clear to everyone that there is a huge problem and that we need a solution. No one said: Let's wait until the election, and then it'll resolve itself. I'm sitting here wearing a sweater because I work all the time. I make cars. In Germany, unfortunately, there is also another agenda. You are electing a new government in the autumn. That will influence the process. It's unfortunate that all of this is happening at the same time. I just hope that there will not be a bad compromise motivated by political reasons. We've seen, in the US, how a problem can be solved.

SPIEGEL: Do you see the US government as being on your side?

Marchionne: President Obama will do what's good for GM. It's his mandate. I understand that. In other words, the American administration cannot be my ally. It needs to protect GM -- but I don't. We had difficult talks over Chrysler with the Treasury Department. But both sides were determined to find a joint solution.

SPIEGEL: How exactly would the close ties between parent company GM and Opel be dissolved?

Marchionne: A clear decision has to be made as to who takes along what in the separation and what remains behind. Opel was a subsidiary, and GM treated it like a child. Things are done differently within a family than with someone from outside the family. The trick is to replace the GM umbilical cord with a Fiat umbilical cord. We can step into GM's shoes right away. That's our advantage. In 36 months, with the 6,500 engineers in Rüsselsheim and our own people, we can completely redesign the Opel architecture.

SPIEGEL: Fiat doesn't exactly enjoy a good reputation when it comes to future-oriented technology. What is the status of hybrid and electric technologies?

Marchionne: We have all of that, or we can buy it. This technology is available in the marketplace -- all it takes is a call to Bosch. The German suppliers are excellent.

SPIEGEL: There was also a last-minute offer from the works councils and the Opel license holders. A desperate move, in your view?

Marchionne: No. I believe that they want to save what they can. But I'm afraid it won't work, because it's not an industrial strategy.

SPIEGEL: Mr. Marchionne, we thank you for this interview.

Interview conducted by Michael Sauga and Alexander Smoltczyk

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