Fiat would remain firmly in Italy, its chairman has said, apparently trying to allay union gears over a possible merger with Opel.

"Fiat has and will continue to have its central roots in Italy," Luca Cordero di Montezemolo was quoted by Reuters as saying in a television interview.

"One thing to be said is that we need to sit down with the government and the unions in a constructive way to discuss structural issues arising not from deals [with other carmakers] but from a very steep fall in demand," he said in an extract of the interview published ahead of its broadcast.

The report said both the Italian government and the unions have called for a meeting with Fiat to learn more about its plans for the five plants it runs in the country in light of the possible merger with Opel. A date for the meeting has yet to be set.

A slide presentation of Fiat's merger proposal, for example, says the Termini Imerese plant would be given "another production mission" within the group after the merger, Reuters said.

Unions in Germany are also worried and have expressed a preference for a bid by Magna International which they said posed less of a risk of plant closures.

Even regional governments in Germany, who fear the political consequences of job losses, have expressed misgivings about Fiat's proposal to merge with Opel, Reuters added.

Unions from both Germany and Italy are to meet in Frankfurt tomorrow (13 May) to discuss the implications of a merger and decide what action to take.

German media reports last week, citing an internal Fiat proposal, said planned factory shutdowns included an Opel powertrain plant in Kaiserslautern in western Germany, the Vauxhall/Opel/Renault van JV plant in Luton in Britain, and a factory in Graz in Austria, plus two Fiat plants in Italy. Plants to have capacity reduced were Zaragoza, Spain, a Saab facility in Sweden and the Opel plant in Belgium.

Fiat has also recently denied media reports it planned to axe 18,000 jobs after German daily Frankfurter Allgemeine Zeitung cited a 'sensitive internal document' titled 'Project Football' dated 3 April.