General Motors has a secret team considering all aspects of a Fiat take-over even before official talks begin, the US website The Car Connection (TCC) says.

TCC said “a well-placed source within GM Europe” revealed there could be at least two major issues in the way of a takeover: GM is fully stretched by its recent Daewoo acquisition and there are also problems ticking away within Fiat itself.

TCC was told that Fiat has a number of long-term, “unbreakable” contracts with suppliers such as Magneti-Marelli which impose costs that limit competitiveness and would burden the company even if it were under new ownership.

The GM investigating team#;s final report will determine if takeover talks proceed, TCC added.