General Motors set to hive off Opel
AFP/The Local · 27 May 2009, 14:47
Published: 27 May 2009 14:47 GMT+02:00
"GM proposed that and the Opel supervisory board accepted it today," a GM spokesman said.
The move consolidates all European plants, patents and technologies within a single judicial entity, he added.
They include assets owned by Opel, its British sister company Vauxhall and production sites for motors and auto parts, but not assets owned by Swedish brand Saab, another GM unit.
German Chancellor Angela Merkel along with representatives from states hosting Opel facilities, General Motors directors and US Treasury officials were to meet late Wednesday for a crunch meeting in the German capital on Opel's future.
But Berlin said it did not plan to choose which investor it prefers for Opel after the talks.
"I don't expect a decision on a single investor," spokesman Ulrich Wilhelm said. "It is much more in the interest of Opel and taxpayers that talks continue with several competing interested parties."
The final decision is GM's but Berlin has its say because the winning bid is expected to benefit in billions of euros in German state loan guarantees.
Three candidates have submitted official bids for Opel, the Italian car maker Fiat, the Canadian auto parts company Magna, and the holding group RHJ International, with China's Beijing Automotive Industry Holding (BAIC) also expressing interest.
According to press reports, BAIC is seeking fewer loan guarantees from Berlin and has pledged not to close any German plants for two years, seen as an attractive proposal in an election year. However, a spokesman for Economy Minister Karl-Theodor zu Guttenberg played down the Chinese bid, telling AFP that the offer was "much less detailed" than the other three offers on the table.
Fresh questions marks also emerged on Wednesday over the bid from Canadian auto parts giant Magna, which until now had been considered the front runner. Magna's offer is backed by Russia's top bank, the state-controlled Sberbank and would see Russian truck maker GAZ making Opel vehicles in Russia Business daily Handelsblatt quoted government advisors criticising Magna's offer for not bringing enough cash to the table.
If the bid were accepted "the new company would be insolvent from day one," the unnamed experts were quoted as saying, adding that a hasty decision would be a "catastrophe."
But Merkel is under pressure from unions, key local state premiers and from members of her own governing coalition to plump for the Canadian bid, seen as the offer likely to result in the fewest jobs lost.
For its part, Italian car giant Fiat seeks to create the world's second largest automaker after Japan's Toyota by combining GM's European and Latin American operations with Chrysler, in which it holds a 20 percent stake.
However, the Italian bid fell foul of Opel's powerful union bosses as details leaked out of sweeping job cuts. Fiat boss Sergio Marchionne held last-gasp talks with Merkel on Tuesday to push his offer. He has said Fiat would cut 10,000 jobs across Europe, including just 2,000 in Germany with no plant closures.
Fiat chairman Luca Cordero di Montezemolo said earlier Wednesday that the bidding war for Opel was "a lottery," adding that Fiat had "done everything possible" to win the bid.
"In a lottery, it's best to wait for the result," he said, adding that a merger between Fiat and Opel would be "an extraordinary opportunity."
Brussels-based RHJ International, the third bidder, owns stakes in auto parts firms including Niles and Asahi in Japan, Belgium's Honsel, as well as Columbia Music Entertainment. But according to Handelsblatt, the RHJ bid has been all but dismissed. "We are concentrating completely on Fiat and Magna," said an expert quoted by the paper.
Another option raised by Economy Minister Karl-Theodor zu Guttenberg is the possibility of declaring Opel insolvent but the government has stressed this is a last resort and would prefer to find an investor.