During the past eight months workers at Fiat's Termini Imerese factory in Sicily which produces the Lancia Ypsilon (above) have had to benefit from the government supported redundancy fund for five months due to the slowdown in vehicle demand.

With opposition to the proposed Fiat-Opel merger steadily growing the carmakers' Italian and German unions are set to meet together to discuss their strategy on Wednesday with the unrest seeing workers at the threatened Termini Imerese plant in Sicily walk out yesterday in a symbolic strike; meanwhile the German government is now expected to decide on a strategy for investment in Opel's future by the end of this month.

The German government is currently examining the plans that have been presented by the potential buyers, including those of Fiat and Magna International, of Opel. The government wants to take a decision on the financial guarantees it plans to offer to the successful package before the end of the month, Peter Struck, an MP of the coalition member SPD, to the daily newspaper BZ yesterday. ''The government'' Struck explained ''is comparing the two plans presented by Fiat and Magna, to be able to take a decision on the request for financial guarantees for billions of euros''

Meanwhile with staff in Italy and Germany showing opposition to Fiat CEO Sergio Marchionne's merger plan, workers at Fiat's Termini Imerese in Sicily went on strike yesterday. Unions decided on a strike of one and a half hours per shift, starting from 9.45 to 11.15. "With respect to the recent news'' the news agency AGI reported Roberto Mastrosimone of the union confederation Fiom Cgil as saying ''the trade unions and labourers have decided to make something clear to the company and regional and national government: we will defend this plant fiercely, as we have in 2002. We will continue our fight for survival''.

During the past eight months workers at Termini Imerese have had to benefit from the government supported redundancy fund for five months due to the slowdown in vehicle demand. After the latest lay-off the gates of the plant where the Lancia Ypsilon is assembled reopened today, two weeks ahead of schedule. The B-segment hatchback model has been selling well since the start of this year, thanks in part to demand for its new "green" versions, allowing the plant to reopen again until the summer. Despite this steady increase in demand tensions at the threatened plant continue, as well as the wider concerns staff have regarding the proposed Fiat-Opel merger plans. News agencies in the last week have reported that any merger between Fiat and GM Europe's car making division, which include Opel, Vauxhall and Saab, could see Fiat's 103-year-old iconic Lancia brand become one of the first causalities of the inevitable restructuring.

While Fiat's unions plan a march in Turin on Saturday to voice their opposition to Marchionne's ambitious plans, Opel's unions have favoured a proposal by rival bidder Magna to guide their future, and German regional governments have voiced concern about job losses, the Fiat CEO sees his plan as the best way to safeguard the future of both firms: "If we succeed in pulling together the social aspects we will succeed in finding a great solution for Europe," he told Reuters on Saturday.

Opel's unions are also sceptical about the value of a deal with Fiat, preferring to back the Magna alternative, and they emerged from a briefing with Marchionne last week unconvinced of the benefits of a merger, despite the Fiat hief's pledge that Germany would see very few of the resulting job losses. They also believe that "Project Phoenix" - the Fiat briefing document - is too short on concrete detail for them to form a concrete opinion. "I have more questions than answers, and the answers are not convincing,” said Klaus Franz, the top union official at Opel and vice chairman of the company’s supervisory board. “I won’t absolutely refuse it in these circumstances, but I think this is a concept to save Fiat, not Opel or GM in Europe," he added.

Meanwhile, during an interview with Italy's La Repubblica newspaper on Monday, Jean-Philip Collin, a board member at PSA Peugeot-Citroën stated he was unconcerned about the prospects of the proposed Fiat-Opel merger. "We do not fear a possible alliance between Fiat and Opel," said Collin, who also revealed that PSA would put mass-production electric passenger cars into production next year. "The car world is certainly not in its first phase of consolidation, we have always been working in a competitive scenario. In periods like this, of scarce liquidity, the best thing is to concentrate resources on few and selected activities: renewing products, strengthening the network and satisfying clients."