TURIN - Despite major social problems, now is the moment to create a big European car maker by combining Italy's Fiat SpA with the European operations of General Motors, including its German brand Opel, Fiat's Chief Executive said on Saturday.

Speaking on the sidelines of an event in Turin, CEO Sergio Marchionne said it was important to be upfront on the problems of creating such a group and how to deal with them, including negotiating with trade unions.

The important thing is to be absolutely honest on the problems and how to deal with them. It is a very big European challenge, he said.

If we succeed in pulling together the social aspects, we will succeed in finding a great solution for Europe, he said on Opel and trade union worries over possible plant closures.

Trade unions at Fiat and Opel have talked about meeting to discuss Marchionne's plans for plants at a combined company and on possible job cuts.

(These) are difficult choices. But it is the moment to do it. If we lose these occasions we go and drag industrial problems into the future, he said.

On Fiat's tie-up with U.S. carmaker Chrysler, he said it is going ahead as expected with typical American speed.

On Friday, a group of dissident creditors dropped legal opposition to Fiat's alliance with Chrysler.

(Writing by Nigel Tutt, Editing by Peter Blackburn)

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