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Fiat's Drive to Supersize Hitting Potential Roadblocks


Unions and other groups are trying to slow down Fiat's drive to become a global force in the automotive industry.

The Italian carmaker has already struck a deal to merge with the U.S. firm Chrysler and says it is also looking to acquire the European arm of General Motors. But union leaders in Europe and some of Chrysler's U.S. creditors are raising opposition.

A senior labor leader for workers at GM's Opel division warned Tuesday that Fiat wants to cut up to 10,000 jobs and close several plants across Europe if it completes a deal.

In an interview with Germany's Bild newspaper, Fiat chief executive Sergio Marchionne said he does not want to close any German factories but that "Opel can never make money at its current size," and that some jobs would have to be eliminated.

Marchionne says, overall, a deal with Opel would lead to immense cost savings.

In the U.S., some of Chrysler's creditors have filed a motion in bankruptcy court to block the sale of some of the U.S. auto company's assets as part of the merger with Fiat. They complain the process has been unfair. However, as part of the bankruptcy process, a judge gave Chrysler permission to begin using $4.5 billion in U.S. government loans to pay some outstanding bills.

Meanwhile, Fiat's chief, Marchionne, has been meeting with German officials Monday to discuss a deal to acquire Opel. He is trying to build a car company to rival Volkswagen, Europe's largest automaker.

GM says other companies have also expressed interest in Opel.

The largest U.S. automaker has gotten $15 billion dollars in emergency loans from the U.S. government to stay in business and is racing to restructure to avoid bankruptcy.

GM said Tuesday sales in China hit a monthly record in April, up 50 percent compared to the same time last year.

GM's U.S. sales in April slid almost 34 percent.

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