Fiat CEO Sergio Marchionne has confirmed that Fiat will submit a detailed plan for a merger with GM Europe's Opel/Vauxhall division by the German government's deadline of next Wednesday (May 20) imposed for bids to be realised. Speaking to reporters yesterday during a presentation Marchionne also confirmed that he will take charge of Chrysler for a short period to steer its onto its new course once it emerges from the on-going Chapter 11 bankruptcy process. Fiat now holds a 20 percent stake in the American automaker.

With the clock rapidly ticking down to the German government's deadline for detailed plans to take a stake in Opel to be lodged, Fiat is lining up against Magna International which is emerging as the only other serious bidder. With deep union concern in Italy about the cuts that would follow a merger between Fiat and Opel, Marchionne confirmed yesterday that he would meet with the unions and also the Italian government once a clear path has emerged. Magna's bid is likely to be funded by Russian investors and automaker GAZ is also likely to be involved. magna is the preferred choice of Opel's unions.

Three parties have had access to Opel's books, according to sources quoted by Reuters. As well as Fiat and Magna, private equity firm Ripplewood has show interest in Opel through its European division RHJ; however it seems unlikely that it will lodge a bid, feeling that it cannot match what is being offered by the other two parties. "We have these two," said German Economy Minister Karl-Theodor zu Guttenberg told Reuters on Thursday. "As to a third one who has made himself known, here the euphoria seems to decline."

Guttenberg imposed the next-Wednesday deadline as he seeks to find a solution for Opel with GM's support rapidly drying up. "By May 20, both investors, or interested parties, want to present their concept," Guttenberg commented last week. "We hope at least for a more sustainable concept than what so far has been presented to us only in very rudimentary fashion."

With GM possibly set to follow Chrysler down the road into Chapter 11 bankruptcy when the U.S. Treasury Department deadline to produce a viable path to restructure itself for the future runs out on June 1, the German government is now working with GM to prepare for a joint state-trustee arrangement if this scenario plays out. Guttenberg however has made finding an investor prepared to take a stake a requirement of activating a state-trustee arrangement. A successful investor could help see the German government keeping a pledge and ploughing 3.3 billion euros in loans to help loss-making Opel turnaround.