FRANKFURT - The senior labor leader of German carmaker Opel (GM.N) warned that Fiat's (FIA.MI) ambitious growth strategy was an all-or-nothing bet, rejecting the Italian rival's takeover concept for the GM Europe brand.

After a meeting on Monday with Fiat Chief Executive Sergio Marchionne, Opel works council chairman and supervisory board member Klaus Franz said his plans foresee the loss of some 9,000 to 10,000 jobs at their combined European operations.

Contrary to Marchionne's comments in public, Franz said on Tuesday the Fiat boss also told him that Opel's Kaiserslautern engine plant would have to be closed along with other Fiat/Opel manufacturing sites in England and Italy.

The financing concept for me is absolutely not convincing. In my opinion he is risking everything, Franz added in an interview with Reuters.

He wants to build a global carmaker financed with German and American taxpayer money.

Franz, a veteran labor leader who has become the public face of Opel, defends the interests of the 50,000 Opel workers across Europe and any deal would likely require his support.

Last week, Fiat agreed to take an initial 20 percent stake Chrysler for no cash and only offering the bankrupt U.S. carmaker payment in kind by sharing its small car technology.

German Economic Minister Karl-Theodor zu Guttenberg on Monday said that Fiat, which already has net industrial debt of 6.6 billion euros ($7.94 billion), had told Berlin that the deal required bridge financing of 5-7 billion euros -- roughly twice as much as Opel's 3.3 billion in requested state aid.

Franz said Marchionne was driven by the ambition to create a global automotive empire that enshrine it as number two in the industry in terms of sales volume after Toyota (7203.T).

The deal with General Motors only makes sense for Marchionne if he can get its Latin American business as well, which he wants GM to bring into the new company, he explained, citing Fiat could beef up its Brazilian operations that most analysts believe is the only profitable business at Fiat Auto.

FAILED MEGA-MERGERS

Beyond their differences over manufacturing overcapacity and job cuts, Franz also criticised Fiat's plans to significantly undervalue and dilute the Opel brand and added that Marchionne was mainly interested in gaining access to GM's compact and mid-size global architectures that Opel would provide.

These so-called 'federalized' platforms, on which Opel builds its Astra and Insignia models, would allow any investor to manufacture small cars adapted to fulfil U.S. requirements and something that Fiat partner Chrysler cannot offer with its focus on minivans, SUVs and large pickups.

Franz called on Berlin to consult closely with automotive experts who could better analyze Fiat's concept, since politicians unfamiliar with the industry may not recognize whether the plan's assumptions for synergies and economies of scale are realistic and sustainable.

The philosophy of bigger is better has failed in the past. It failed with General Motors, with DaimlerChrysler -- all these mega-mergers have in the end failed, he said.

Franz said he has already held constructive talks with Magna's (MGa.TO) chairman and founder, Frank Stronach, and his Co-CEO Siegfried Wolf and planned to hold further discussions with other potential investors, who he declined to name.

He remained open to further negotiations with Marchionne, reaffirming he was not hostile toward Fiat's approach, but added that a second meeting was not arranged.

Whoever believes in the concept that only huge companies formed through mega-mergers will survive will favor Fiat, but whoever believes in innovation, flexibility and economies of scale through partnerships will favor Magna, Franz said.

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