Fiat CEO Sergio Marchionne met with union bosses yesterday to try to allay the fears of Opel workers who build cars including the Astra (top) and Corsa (bottom) that a merger with Fiat could result in large jobs losses and that he has a viable plan that can safeguard the German carmaker's future.

After Fiat CEO Sergio Marchionne met with Opel's powerful IG Metall union yesterday, it has been revealed that, following the pattern of the Chrysler deal, Fiat won't be injecting any of its own capital into Opel if a deal is agreed and instead the restructuring will be reliant on a massive dose government state aid of up to 7 billion euros. Today is the German government's deadline day for bids for Opel to be submitted.

Marchionne met with union bosses yesterday to try to allay the fears of Opel workers that a merger with Fiat could result in large jobs losses, and that he has a viable plan that can safeguard the German carmaker's future. After the meeting, IG Metall chief Bertold Huber told a press conference that the talks were "open and constructive" and that any buyer should have adequate capital and liquidity to put Opel onto a strong footing for the future. He also wants to see the situation resolved as quickly as possible. "We don't want to wait for the insolvency of GM," commented Huber. GM has been given until June 1 by the U.S. treasury Department to restructure of face bankruptcy.

Marchionne said after meeting Huber that he had made no promises on job security, telling reporters that he "didn’t discuss numbers with anybody." And adding that: "The real issue is that it’s not just an Opel issue, it’s an industry question. We do have a structural overcapacity problem in the industry across Europe and in the U.S. We need to act European in this context."

However it has been made clear yesterday that Fiat won't put any of its own cash into the merged entity. "Fiat will not be bringing cash, but will offer its assets in exchange," a Fiat source had told AP earlier yesterday. The deal being proposed by Fiat is similar to the one accepted by the U.S. government for Chrysler in that no cash was provided by Fiat. In the Chrysler case Fiat was offering access to its own technology in exchange for taking an initial 20 percent stake. This can be raised to a controlling interest in the future after certain targets are met. Marchionne is hoping to create his new global carmaking group by using state aid from both sides of the Atlantic and is hoping to replicate the Chrysler strategy by persuading the German government and administrations in other European countries where GM Europe has factories located to hand over billions of euros in loans. "All these operations require bridge loans," Marchionne said during an interview yesterday. "We'll finalise the numbers."

During the interview Marchionne also confirmed that his proposal for the takeover of Opel won't involve any injection of equity but will include assets that are "better than cash". Revealing that he hasn't submitted any bid for Opel yet, Marchionne added that "you’re getting a whole pile of assets that produce cash, which is as good or probably better than cash." Without outlining any financial details Marchionne said that: "What we can offer Opel is a lot. Cash runs out; assets that produce cash don't."

Meanwhile former Chrysler minority shareholder Daimler AG's Chairman Dieter Zetsche has said he has a "strong hope" that the Fiat-Chrysler alliance can be successful, while at the same time acknowledging that the deal to give up its 19.9 percent stake was "certainly not cheap for us." As well as giving up its stake, Daimler wrote off a US$1.5 billion loan made to Cerberus Capital Management LLC when its sold 80.1 percent of the equity. Daimler AG also agreed last month to pay US$600 million into Chrysler's pension pot in three instalments, the last coming in 2011. "It was certainly a fair package altogether for all parties involved," Zetsche told reporters yesterday, adding that he was "very satisfied" with the deal." Zetsche went on to say that he looked forward to the new entity being able to hold its place. "I certainly do hope that some of the strengths Fiat can bring to the party will help Chrysler and vice versa so that it can be stronger than a stand-alone form," he said, but noting however that it is "very difficult to make that assessment from the outside."