Fiat SpA's plan to take over the struggling US car giant General Motors' German subsidiary, Adam Opel GmbH, has surprised analysts as the Italian carmaker reporting huge losses for its first quarter of 2009.

 According to a report in German magazine Der Spiegel, Fiat has ''discussed a potential deal with government negotiators in Washington, executives at GM and representatives of the German government,'' on a possible acquisition of Opel.

Although the move seems to make sense with the restructuring of GM, which has already accepted US administration's bailout money of about $9 billion, analysts are wondering how long Fiat will be able to hold on with such investments.

 Fiat is already in discussions with Chrysler to acquire a minority 20-per cent stake in the company, the deadline for which is set by 30 April. If the deal could be signed within the time frame, the Obama administration has said that it could get an additional $6 billion in loans.

 Further, the analysts point out that the Italian giant reported a loss of €410 million ($531 million) in the first quarter, compared with earnings of €405 million for the same period last year. Fiat sold 2.15 million cars in 2008, and its revenue fell 25 per cent, to €11.3 billion.

Opel union leaders and some German government officials oppose any deal with Fiat, because they fear that an alliance would result in more job losses than a takeover by Magna International of  Canada, also a front-runner for Opel.

 The head of the Opel workers' council, Klaus Franz, confirmed to German press agency Deutsche Presse-Agentur on Thursday that Fiat intends to take a majority stake in Opel and Vauxhall.

However, Franz claimed Fiat was not interested in a strategic partnership, but feared it simply wanted short-term access to guarantees.

''Fiat has €14.2 billion of debt and huge liquidity problems. They can't get hold of money at the moment,'' Franz said.

Last month, GM Europe executives presented a restructuring proposal to the government that includes €3.3 billion ($4.2 billion) in public aid from Germany and other European countries where it has factories.

German chancellor Angela Merkel agreed to offer state aid to a potential Opel investor to save jobs as the carmaker's parent, GM, is in the restructuring mode.

A collapse of Opel is expected to result in the loss of around 400,000 jobs across Europe. Opel has 26,000 employees in Germany.

However, union leaders see Merkel's promise as an election ploy as she is set to run for her second presidency in September.

 ''The government can't give guarantees for such a transparent plan,'' Franz said, adding that he fears a ''dramatic reduction of jobs at Opel and the closure of plants in Germany.''

Meanwhile, German economics minister Karl-Theodor zu Guttenberg, denied any knowledge on the Fiat-Opel talks.

''The federal government is holding talks with various interested parties, without any predetermination,'' Guttenberg said in Berlin.

However, Fiat CEO, Sergio Marchionne, who is in Washington for talks on the Chrysler deal, has raised the possibility of acquiring Opel.

During a conference call with analysts on Thursday, Marchionne said he had not had direct talks with Opel, adding, ''Chrysler is my first and foremost objective.''

''We need to go back to making cars and making money making cars,'' Mr. Marchionne told analysts, adding that ''this is an incredibly poor industry, and we have not earned our cost of capital. We have caused enormous damage by the moves we made.''

A merger with Opel would substantially improve Fiat's sales mix in Europe. While Opel is strong in Germany and Britain, Fiat is concentrated in Southern Europe.

If Fiat could enter into a deal with Chrysler and Opel, the combined entity would become the largest automaker in the world, behind Japan's Toyota Motor and GM.