Fiat Eyes Another Struggling Carmaker – US-FOREX.US
Fiat is going on another shopping spree of troubled auto companies. The Italian carmaker confirmed on Tuesday that it was interested in acquiring the struggling industrial arm of boutique car maker Bertone.
“We will express our interest in Bertone’s industrial assets before the deadline on Thursday,” a Fiat spokesman said. Berton is a boutique company that big auto players have used to outsource production to. Fiat is interested in the firm’s assets, which mainly consist of factories and real estate, and in particular its painting facilities. Fiat intends to offer around 20 million euros for Bertone’s Grugliasco plant, equipment and staff, but not the whole brand.
Fiat said the new assets could potentially be used for Chrysler cars now that the Italian car maker owns a 19.9% stake in its U.S. rival.
In recent weeks, there have also been other bidders for Bertone, whose industrial arm was put into administration-a form of Chapter 11 bankrupcty protection-in 2008 as the car industry witnessed a sales slump.
Bertone’s industrial arm was a specialist dedicated to produce limited runs of cars for European companies, including General Motors
. It’s troubles began late in 2005 after Bertone lost a contract with GM Europe. Since then, its only project was a 2,000-unit run of a limited-edition of BMW’s Mini in the summer of 2006. It used to produce between 30,000 to 34,000 units per year but its plants have now been virtually abandoned. The company also has a designer arm, which is not in any known financial difficulty.
According to Italian media reports, other bidders for Bertone include the former manager of Telecom Italia, Giandomenico Rossignolo, financier Domenico Reviglio and Lilli Bertone, wife of the founder Nuccio Bertone, the former owner.
A judge still needs to decide whether Fiat has a strong business case for the company before it gives the go-ahead for the second round of the bidding process.
Bertone’s industrial arm still has over 1,000 employees and some analysts are struggling to see why Fiat wants to buy the company. “There is no rationale for Fiat to buy 1,000 employees as it tries to fire roughly 2,000 in other plants,” said Guglielmo Manetti, an analyst with Intermonte SIM. Fiat would not comment.
Separately, Fiat’s new car sales were up 11.7% last month and its market share rose to 8.6% from 7.9% the year before. Shares of Fiat
rose 2.3%, to 7.17 euros in afternoon trading in Milan.
Thomson Reuters contributed to this article.