Fiat reaches for Opel

TURIN, Italy, May 5 (UPI) -- Italian automaker Fiat said it would continue to reach across borders as it pursues a deal to purchase General Motors Corp.'s European operations.

Fiat's board of directors said in a statement it had given Chief Executive Officer Sergio Marchionne permission to pursue Opel in Germany and Vauxhall in Britain, both owned by GM.

Marchionne is chasing a goal of building 5.5 million automobiles a year, The Washington Post reported Tuesday. Fiat currently makes 2.2 million cars a year.

Marchionne met Monday with German officials to pave the way for an alliance with Opel. On Thursday Fiat forged an alliance with Chrysler LLC, which gives the Italian company 20 percent control of the third largest U.S. automaker.

Chrysler is restructuring its finances in bankruptcy court in New York.

But, analysts are concerned Fiat may be stretching its resources too far.

"Chrysler is chronically loss-making … Opel is seriously unprofitable. Fiat in Europe has barely been profitable in the last 20 years," industry analyst Max Warburton at Sanford C. Bernstein in London, wrote in a research note.

If a deal with GM goes through, Fiat said it was considering spinning its car unit off from its construction and agricultural equipment businesses and its truck manufacturing.