Fiat ups offer

In an interview published in the Tuesday edition of the Bild newspaper, Marchionne said he wanted to hold on to all of the four Opel plants in Germany but that job cuts may be inevitable.

"We don't want to close any of the four Opel plants in Germany. I need these plants in the future to build sufficient numbers of cars," Marchionne told the paper. "But of course the work force will have to be cut. Nobody can change that," the Fiat CEO said.

Fiat drums up support

Marchionne's comments come a day after meeting Germany's Economics Minister Karl-Theodor zu Guttenberg and Chancellor Angela Merkel in separate meetings in Berlin.

Fiat is stepping up efforts to win support for its plan to take over General Motors' struggling European business which includes Britain's Vauxhall, Sweden's Saab and Germany's Opel. Separately, Fiat is also trying to take over some of Chrysler, the US carmaker that has applied for bankruptcy protection.

Marchionne's plan is to merge the two to create a new global auto giant that would be around the same size as Germany's Volkswagen, Europe's biggest carmaker.

Germany's Opel forms the core of GM's European operations, and Marchionne needs the approval of Chancellor Angela Merkel's government in Berlin for any deal to go through - something that Marchionne wants within 30 days.

Competing offer

German media have reported Berlin is more eager to see an offer from Magna, an Austrian-Canadian car parts manufacturer.

Magna founder and chairman Frank Stronach told the Canadian newspaper The Globe and Mail that he was seeking a stake of less that 20 percent of Opel, not a controlling stake.

Magna, Stronach said, would need to act with other partners, that he would not identify. The Globe and Mail wrote that some sources have said these partners include OAO Gaz, a Russian carmaker, and a partially state-owned Russian bank.

Marchionne also suspects Russian partners and predicts this will sway the German government toward Fiat.

"Magna wants to take on Opel with Russian help. If the German government thinks that's a good solution, I'll be surprised," he said.

Germany remains skeptical of Fiat

Germany's Economics Minister Guttenberg has called Marchionne's plan "an interesting concept" but said the German government would need to take time before reaching any conclusions. Guttenberg also said he remained open to bids from other investors.

Opel's works council and Germany's powerful trade unions have also voiced skepticism about a possible Fiat takeover. Opel employs nearly 26,000 in Germany.

But Marchionne told Bild that Opel's financial woes had left the carmaker with little choice.

"Opel can never make money given its current size. And if you can't make money, you can't survive," Marchionne said. "I understand the unions' fears - but this is reality."