• Germany's news in English

General Motors set to hive off Opel

AFP/The Local · 27 May 2009, 14:47

Published: 27 May 2009 14:47 GMT+02:00

Facebook Twitter Google+ reddit

"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)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German town, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd