With its bid submitted for Opel on Wednesday, Fiat has tried to dampen widespread media reports that around 18,000 redundancies would come with a merger between the two carmakers, instead saying that the job losses will be much lower.

Fiat has issued a statement to counter the newspaper speculation as it battles to convince sceptical unions at Opel as well as German government ministers that it can create a giant new company that won't shed jobs in Germany. "For some time, comments have been circulating that, in the event Fiat were to acquire Opel, there would be approximately 18,000 redundancies in Germany. These comments are entirely unfounded," read the press release issued in Turin. The statement went on to put prospective job losses from the merger at around the 10,000 mark, saying that: "The Fiat plan is for total employee reductions - which would take place gradually and be distributed throughout Europe - of less than 10,000. The impact for the workforce in Germany, therefore, would be significantly lower than speculated.

With bids now in from Fiat, Magna International and Brussels-based private equity house RHJ International, as well as reports starting to emerge of a possible - but mysterious - Chinese bidder, the German government hasn't picked a favoured bidder as yet. ''At the moment we have no preferences'' said spokesman Thomas Stag who added that he was unaware of a fourth Chinese offer.

With German politicians highly sensitive to the prospect of any job losses ahead of a general election scheduled for later this year, Fiat's cause hasn't been helped by Roland Koch, the premier of Hesse a region where one of Opel's plants is located, who said yesterday that he favours the Magna International bid. "The bid of Magna is the one that comes closest to the ambitions of the German political arena and of the workers," Italian news agency AGI reported Koch as saying. "I am certainly very disappointed in the offer made by Fiat. It's far from what we hoped. The offer must be changed before we can take it into consideration." It is believed the Fiat bid calls for 7 billion euros in state aid while the other two bids foresee 5 billion euros being made available. In an interview on the public service radio station Deutschlandfunk Koch said that the Magna bid "counts very much on being able to win new markets and new customers with new ideas, whereas the others who are bidding focus more on rationalisations." Media outlets also claim that Magna is GM's favoured bidder.