Chrysler-Fiat talks intensify, Saturn deal eyed

By Kevin Krolicki and Soyoung Kim

DETROIT (Reuters) - Fiat SpA Chief Executive Sergio Marchionne turned up the heat on talks with struggling U.S. automaker Chrysler on Wednesday as General Motors Corp confirmed a possible taker for its Saturn network.

An investor group that includes private equity firm Black Oak Partners LLC and some Saturn dealers has approached GM about buying the assets of the Saturn brand and distribution network.

In late March, the U.S. auto task force rejected the turnaround plans of Chrysler and GM, telling Chrysler it had until April 30 to cement the alliance with Fiat and reach deals to cut its labor costs and debt.

GM was given until the end of May to make much deeper cuts and make them far quicker than the automaker had envisioned if it wants to hold the $13.4 billion of U.S. government emergency loans it received and additional support.

Marchionne said he saw no reason why Fiat and Chrysler could not complete a proposed alliance by the end of April, a target set by the U.S. auto task force that must decide whether to provide more government aid to the Detroit automaker.

"I intend to reach a good conclusion," Marchionne told reporters at a news conference in Zurich, adding that Fiat has other options as well.

Marchionne, in an interview with the Globe and Mail newspaper published on Wednesday, said a deal on the partnership had only a 50-50 chance of succeeding because of lack of progress in talks between Chrysler and union leaders.

The Canadian Auto Workers union said on Wednesday that it plans to resume talks with Chrysler on Monday that have been stalled since the beginning of April. Those talks are crucial to Chrysler completing an alliance with Fiat.