With Fiat having closed the alliance with Chrysler late last week the attention of Fiat Group CEO Sergio Marchionne has turned to GM's European divisions, Opel and Vauxhall, and a push to strike a second deal as he bids to create a giant new carmaking group. "Now we have to concentrate on Opel. They are our perfect partner," Marchionne told the Fiat Group-owned Italian newspaper La Stampa in an interview at the end of last week.

Marchionne will be travelling to Germany tomorrow morning to meet German Foreign Minister Frank-Walter Steinmeier and Economy Minister Karl-Theodor zu Guttenberg. Newspaper reports to this end were clarified when a foreign ministry spokesperson confirmed the meetings yesterday. Marchionne is also expected to meet GM Europe officials. A GM Europe spokesperson said on Friday that "The talks with a couple of interested parties will be held in the coming days," but declined to name any names.

German magazine Wirtschafts Woche reports - citing sources close to the negotiations - that Fiat will offer less that US$1 billion to take a stake in GM Europe's Vauxhall/Opel unit. GM, it says believes, that offer is too low, although just weeks ago it was expecting to unload a stake in its European operations for close to zero.

The approach to GM Europe comes just days after Fiat has taken an initial 20 percent stake in Chrysler LLC, which will eventually rise to 55 percent, and the ailing North American carmaker is now being restructured through what is expected to be a short 'surgical' Chapter 11 bankruptcy process with eight of its plants reportedly set to be shutdown during the restructuring. Importantly Fiat is wresting operation control of Chrysler's operations in a deal that is tipped in its favour.

Taking a key stake in GM's European manufacturing division would help Marchionne achieve his ambition to create a carmaker that has production in excess of 6 million units a year, a figure that he has long believed is the minimum number that is needed to create the economies of scale necessary to be profitable in the future. Combining together the operations of Fiat, Chrysler and chunks of GM, including its operations in Europe and Latin America, would create a new company with production of around 7 million units a year, and second only in size to Japanese giant Toyota. The deal to take a stake in GM's European operations though wouldn't include Saab (which GM is currently trying to sell off) or the European sales operations of its imported US brands including Chevrolet, reports Automotive News Europe citing inside sources.

If GM sells a major stake in its European division it could trigger a US$2.6 billion euros emergency loan from the German government, and Fiat, along with Canadian-Austria components and contract manufacturer Magna International, are the two leading contenders to grab a slice of the division. GM wants to wrap up a deal to sell a stake in Vauxhall/Opel within the next 2-3 weeks as it - like Chrysler was - is facing US government deadlines to come up with a viable restructuring plan. However over the weekend Magna has given out signals that would appear to see it backing away from its ambitious plans to take a stake.

The Vauxhall/Opel unions have been very quick to throw their weight behind the Magna bid fearing that the Fiat option could lead to massive job cuts amongst the 25,000 strong workforce as well as plant closures as there is significant overlap in the Fiat and Vauxhall/Opel model ranges. However Marchionne tried to reassume worried workers, particularly in Germany, during his interview La Stampa, telling the newspaper: "I have never given up for a second my commitment to the Italian system. Together with the unions and the government we must be able to face up to the structural problems responsibly, remaining faithful to the commitments to workers."