In Italy, it seems everyone has a theory about what will happen to Fiat Auto. Potential buyers or merger partners for Fiat S.p.A.'s money-losing car division continue to surface. The list now includes Ford, General Motors, Toyota, Mitsubishi and DaimlerChrysler.
It is by no means certain that Fiat Auto will be sold or merged. Chairman Paolo Cantarella says the company can grow by itself. But Fiat Group Chairman Paolo Fresco sounds less certain: 'Fiat Auto has to strengthen before entering a possible alliance,' he said.
The Agnelli family, which controls 30 percent of the voting shares, admits the possibilities.
'Fiat Auto can go it alone, but is destined to find some form of alliance,' said Honorary Chairman Gianni Agnelli. 'But what type and when, I don't know.'
His younger brother Umberto recently gave a clue. 'At a certain moment,' he said, 'the best agreement could be with someone much bigger than you. At that point, you will become shareholder of a bigger and stronger group.'
Fresco and Cantarella share a philosophy that suggests that an alliance is inevitable. They believe that every operating sector of the group should be a global leader in its field.
To that end, Fiat has spent more than $5 billion this year to become the world's largest in both machine tools and agricultural equipment. It bought Progressive Tools and Industries Co., a machine tool maker, and merged it with its Comau unit. Fiat has also bought Case, the U.S. farm equipment conglomerate, and joined it with New Holland, its London-based agricultural tractor and construction equipment division.
But in its core vehicles business, Fiat is still far from the top rank. Fiat Auto is the world's sixth-largest carmaker, and Iveco is the ninth-largest heavy-truck maker.
They could get bigger through acquisition. Fresco has said that Fiat can raise $10 billion to do another deal, but he admits that 'it is more difficult to find good opportunities than the funds to finance them.'
Early this year, Fiat Group offered $13.5 billion to buy AB Volvo, a move that would have strengthened both Fiat Auto and Iveco. But Volvo decided to sell just its car unit to Ford Motor Co. for $6.45 billion.
An alliance with a stronger or same-sized partner seems the only way to become a world leader quickly.
'We wanted to buy Fiat Auto,' DaimlerChrysler executive Juergen Hubbert said last month. 'But the Agnellis definitely do not want to sell at the moment.'
Fiat refused to comment on Hubbert's remarks
Meanwhile, another door has opened. Fiat and Ford negotiated to a stalemate in the 1980s, but they have begun talking again. This time, there is a third player that could help make a Fiat-Ford marriage a reality - the U.S. industrial conglomerate General Electric.
The previous talks collapsed in October 1985, mainly because the partners could not decide which would own 51 percent of the new company. Now, they might get around that obstacle by having General Electric as a third shareholder, with GE's chairman, Jack Welch, as the group's referee.
Fiat S.p.A. and Ford Motor Co. would each own 40 percent and GE would own the remaining 20 percent, according to one theory.
Welch, who is set to retire from GE next year, was named to Fiat's board of directors on June 23. Those who know the 'shareholder-value' guru say he didn't join the board just because of his friendship with Paolo Fresco, his top lieutenant at GE before Fresco moved to Fiat in July 1998.
'Welch turns down dozens of board offers a day,' said a GE insider. 'If he decided to take a position so far away from the United States, it means there is something more, both for him and for GE.'
How would the deal be structured? According to one theory, Fiat would deliver its auto division; Magneti Marelli, its auto components operation; and maybe also Comau. Ford would contribute Ford of Europe and Visteon.
Fiat would run Visteon-Magneti Marelli, which would be the second-largest supplier in the world behind Delphi Automotive and well ahead of current No. 2 Robert Bosch. Ford would manage the combined automotive operations. After a few years, GE's 20 percent could be floated.
Meanwhile, Toyota lingers in the background. The Japanese company made its first offer to buy Fiat Auto in 1987. The Agnellis said 'no thanks' at that time, but the two companies never stopped talking. Some Fiat watchers in Italy say Toyota is really the one to watch.