• Germany's news in English
 
app_header_v3

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.

Story continues below…

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.

AFP/The Local (news@thelocal.de)

Your comments about this article

Today's headlines
Stuttgart fest pulls in twice as many boozers as Oktoberfest
Is this Oktoberfest or is this Stuttgart's Cannstatter Volksfest? Can you tell the difference? Well, it's Stuttgart. Photo: DPA.

Apparently Munich is no longer the top place to wear lederhosen and down beer one litre at a time.

Dresden mosque, conference hall hit by homemade bombs
The Dresden mosque that was hit by a homemade bomb attack on Monday. Photo: DPA.

Bomb attacks hit a mosque and a congress centre in the eastern German city of Dresden, police said on Tuesday, adding that they suspected a xenophobic and nationalist motive.

The Local List
10 German films you have to watch before you die
Photo: DPA

These films are so good, not even The Cabinet of Dr. Caligari made the list.

Young man destroys 17 cars after visiting Oktoberfest

Early on Monday morning a drunk 29-year-old trashed 17 cars after staggering out of Oktoberfest into the Munich streets. It was one of several eye-popping crimes from "Wiesn" over the past few days.

VW emissions scandal
Audi tech chief leaves after reports link him to 'dieselgate'
Audi's head of technical development Stefan Knirsch stepped down on Monday. Photo: DPA.

Audi's head of technical development stepped down "with immediate effect" on Monday, the luxury carmaker announced, after German media accused him of involvement in parent company Volkswagen's "dieselgate" scandal.

Deutsche Bank shares hit lowest level in quarter century
Photo: DPA.

Shares in Deutsche Bank, Germany's biggest lender, sank to a historic low on Monday after reports at the weekend that Berlin had refused state aid for the embattled lender.

The Local List
The 10 worst German cities for students to find digs
Photo: DPA

It's the start of autumn, which means the start of the university year. But along with the excitement comes the stress of finding housing - and in some glamorous locations this can be a nightmare.

German broadcaster sues Turkey over confiscated video
Akif Cagatay Kilic. Photo: DPA

German international broadcaster Deutsche Welle said Monday it had filed a civil complaint after a Turkish minister's office confiscated a taped video interview with him.

Germany's 'James Bond' goes on trial over tax evasion
Werner Mauss. Photo: DPA.

Germany's former top spy, Werner Mauss, went on trial on Monday accused of hiding millions of euros from authorities.

Germany holds first national 'mermaiding' championship
Photo: DPA

Ariel would be proud.

Sponsored Article
The Inner Circle: the secret to dating in Berlin
Lifestyle
10 German films you have to watch before you die
Sponsored Article
Why Jordan is the ‘Different’ East
Lifestyle
6 things about Munich that’ll stay with you forever
Lifestyle
10 pieces of German slang you'll never learn in class
National
Seven great reasons to stay in Germany this September
Sponsored Article
Retiring abroad: ensuring your health is covered
National
Ouch! Naked swimmer hospitalized after angler hooks his penis
National
Six reasons why Berlin is now known as 'the failed city'
National
15 tell-tale signs you’ll never quite master German
Culture
7 American habits that make Germans very, very uncomfortable
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Rhineland
Story of a fugitive cow who outwitted police for weeks before capture
Culture
Eleven famous Germans with surnames that'll make your sides split
Sponsored Article
The Inner Circle: the secret to dating in Berlin
Lifestyle
The best ways to get a visa as an American in Germany
Gallery
Germany's 17 Olympic gold medals in pictures
14 facts you never knew about the Brandenburg Gate
Society
Ten times Germans proved they really, really love beer
National
Six things you need to know when moving to Germany
Travel
These 10 little-known German towns are a must see
International
German scientists prove birds can sleep while flying
Technology
London v. Berlin: Which is better for startups?
Lifestyle
13 mortifying mistakes German learners always make
Travel
Enter if you dare: Berlin's best abandoned haunts
Lifestyle
10 rookie errors all Brits make when they arrive in Germany
6,511
jobs available
Toytown Germany
Germany's English-speaking crowd