Fiat's recent brief official announcement, that the shareholder meeting planned for May 10th has been postponed, has sent the rumour mill into overdrive, that more major changes are about to be unveiled.

Attention has focused in the last few weeks on the possible new developments relating to the 3 billion bank loan which is due to be repaid by September. Speculation suggests that there might now be a breakthrough in talks with the consortium of major banks who provided this injection of capital three years ago, when the Italian carmaker was in crisis. 

The eight banks, led by IMI, Sanpaolo, Banca Intesa and Capitalia, own the right to convert this 3 billion euro loan into shares, if Fiat is unable to make the repayment. With Fiat shares languishing, it is suggested that Marchionne is pressurising the banks for an extension, and playing upon well recorded strategic differences of opinion between the eight. Yesterday, at the Italian Investor day in New York, Fiat claimed "ongoing full support from the banking system".

Hard hitting Fiat Group CEO Sergio Marchionne, who is also acting as the boss of the Auto Division, made clear during February 2005 that he was pushing for the repayment to be deferred from its September date, and he hinted that talks were making progress.

Italia media sources have speculated over the last few days that as well as this coming in the form of the banks taking up a share stake in the Fiat Group that would see them left with a holding close in size to that held by the Agnelli family, who have controlled the destiny of the century-old carmaker for almost its entire existence, there is also the possibility that certain assets could be spun off to the banks in the form of repayment.

Speculation also surrounds suggestions that a further round of senior management redundancies could be in store. Sergio Marchionne has already been chopping away top management posts, as he seeks to cut the Group's costs with aggressive reductions in non-essential areas, and talk centers around a fresh restructuring which would see the current 28 managers reduced to just 10. The cost-governance based turnaround strategy will make full use of combined management expertise, focusing on a small, dynamic and highly international team.

Certain leading Italian media sources have raised the idea that current Fiat Group Chairman Luca di Montezemolo could be about to depart from the group. They believe that the interim 'crisis' period following the death of then Chairman Umberto Agnelli is now over, and with Marchionne having plotted a recovery programme, he would be left free to concentrate on his role as boss of Confidustria, the Italian trade body.

Lastly, other suggestions being touted are that a major new alliance is in the offing. This could possibly be with the Shanghai Auto Industry Corporation, in recent months linked to Fiat. The Chinese company have been firmly in the headlines this week, their interest in a deal with the British carmaker MG-Rover seeming fading, once they realised the full extent of the no liquidated firm's liabilities. Along these lines, the potential of the route of low-cost countries sourcing was presented yesterday at the investor meeting in New York.

Another name being linked to a much deeper alliance is the French PSA Peugeot-Citroen carmaker, with whom in recent weeks Fiat announced a fresh joint venture to manufacturer an all-new light commercial vehicle in Turkey. This new arrangement comes on top of a long term agreement that already sees them built the Fiat Ulysse, Scudo and Ducato, along with the Lancia Phedra, as part of a joint venture together.  Across the range, component standardisation would also be fully exploited.

Fiat predict that capacity utilization in the automotive sector will be up from 73% to 94% by 2007 for Europe. In-house number crunchers also estimate profitability and operating cash generation to be restored in 2006, supported by reduced cost of funding. A healthy net industry debt to Group equity ratio of 1:1 will complement this by the end of 2006.