GERMAN UNION leaders at Opel have warned against Italy’s Fiat taking control of the troubled car company. The warning came amid reports Italian executives may sign a memorandum of understanding as early as next week to buy the European subsidiary of General Motors.

The Italian approach was confirmed yesterday by leading Christian Democrat (CDU) Roland Koch and Opel works chief Klaus Franz. Union leaders and industry analysts said they were unsure of the alliance’s chances of success.

“Even the strongest child can’t bear two sick parents,” said Armin Schild of IG Metall union and a supervisory board member at Opel.

The Italian car company was experiencing “dramatic overcapacity” he said, and an Opel take-over could put the German company at risk a second time.

German auto analysts have expressed doubts about the ability of Fiat to swallow Opel as it negotiates to buy a 20 per cent stake in Chrysler.

Fiat chief executive Sergio Marchionne declined to comment directly on its intentions with Opel, saying yesterday that the firm was “open to discussions”.

He added that Fiat was determined to push ahead with the Chrysler deal.

A second bidder for Opel is Canadian auto parts company Magna International.

“It’s a good thing for Opel’s future that there is competition for the company,” said Mr Koch.

“Magna and Fiat are two of the possible partners. But it is clear that there are no decisions yet.”

German officials favour Magna over Fiat, for fear an Italian take- over would lead to severe job cuts.

They are concerned that the heavily indebted Fiat is only interested in Opel to get its hands on promised government funds from Berlin.

Opel and Fiat have worked together in development and production in the past, although a five-year co-operation ended acrimoniously in 2005.