Italian automobile giant Fiat SpA is redrawing its business plans to create an automotive empire by taking over General Motors' Europe, South American and South African operations.
If the plan goes through, Fiat will become the world's second-largest carmaker after Japan's Toyota, as it already has sealed a deal with troubled US automaker Chrysler LLC.
According to reports, Fiat is planning to merge its car business with GM's German brand Opel, UK brand Vauxhall, and Sweden's Saab unit.
The company had submitted the plan, dubbed Project Phoenix, to the German governmentthis earlier this week. With these acquisitions, Fiat foresees annual savings of around euro1.4 billion from 2015 onwards.
Fiat chief executive Sergio Marchionne is expected to return to Europe today from the US to lobby for his plan.
There were earlier reports that Marchionne is to meet German economy minister Kar-Theodor zu Guttenberg and foreign minister Frank-Walter Steinmeier to present a concept for the take over of Opel. (See: Fiat mulls Opel takeover even as it inks Chrysler deal).
Opel has said that it needs euro3.3 billion to see it through the economic crisis, while the German government has said it does not foresee giving direct state aid.
However, German chancellor Angela Merkel had suggested that the government could arrange loan guarantees for an Opel investor.
Fiat vice chairman John Elkann told journalists at St Gallen, Switzerland, that the aim of Fiat's plans was to create a strong car maker with long-term prospects.
"That's today what really matters," Elkann said.
Italian Prime Minister Silvio Berlusconi said on Tuesday he was confident a deal with Opel would go ahead.
"All the information I have is that there is great interest in this operation, which would be almost a dream for all Italians," he said in a television interview.
However, the move met with opposition from German labor unions, which fear job losses and plant closure across Europe.
According to the document, Fiat aims to manage the brands independently. Fiat's Italian brands would be run from Turin, while Opel would be managed from Ruesselsheim near Frankfurt and Saab would continue to be run from Trollhattan in Sweden.
GM Europe has said it needs to cut costs by $1.2 billion to return Opel to profit by 2011. In order to avert job losses, the company said it may need at least euro3.3 billion in state aid.
GM was facing severe crisis due to the economic downswing. On Thursday, it reported a net loss of $6 billion, including special items, in the first quarter of 2009, compared with a net loss of $3.3 billion in the year-ago quarter.
The company's revenue for the first quarter of 2009 was $22.4 billion, down 47 per cent from $42.4 billion in the year-ago quarter. The drop in revenue was primarily due to decline in production volume of 903,000 units, or approximately 40 per cent, on a global basis year-on-year.
GM on Monday said that it is proceeding with the sale of Saturn, which markets vehicles in the US and Canada through a network of about 400 retailer locations.