• Germany's news in English

GM meets to mull offers on Opel's future

AFP · 21 Aug 2009, 08:00

Published: 21 Aug 2009 08:00 GMT+02:00

Facebook Twitter Google+ reddit

GM emerged from bankrutpcy in July after wiping out $47 billion in debt and is now majority-owned by the US government.

The 100-year-old company, once the world's largest automaker, has felt heat from Germany to choose a takeover bid from Magna International, a Canadia auto parts manufacturer, backed by state-owned Russian bank Sberbank.

But GM prefers a rival bid from Brussels-based investment group RHJ International.

GM officials told AFP the board would hold a conference call to discuss the company's European operations.

"They're going to meet by phone to go over the status of the bids," said a GM official, who requested anonymity.

"However, there are still some open issues. Unfortunately, we don't have anything else to say at this point," the official said.

German Chancellor Angela Merkel's government is seeking to snare the jobs-saving deal before the September 27 general elections.

A final decision might not come until next week, GM officials indicated.

The high-stakes maneuvering continued Thursday in Detroit, Michigan, the capital of the US auto industry.

Magna officials confirmed privately that representatives of the Canadian auto parts maker and Russia's Sberbank had met with GM officials in "Motor City."

"It was a relationship-building exercise," said one Magna official, who requested anonymity and added: "There were not any negotiations."

Opel, which has 25,000 employees in Germany, is considered too weak to survive without a partner.

Magna is offering €350 million of its own capital and €150 million in credit to Opel; RHJ has pledged €275 million of its own money.

While Germany has made clear its preference for Magna, GM has indicated that RHJ's plan would be easier to put in place.

On Thursday, the Frankfurter Allgemeine (FAZ) German daily reported that Jochen Homann, the head of the German government's "Opel Task Force," said he had offered GM a €4.5-billion loan.

Previously, the plan was for Germany to participate in the loan with other European countries where Opel has factories, but the Task Force chief said that Berlin decided to go it alone, at least for now.

Germany is willing to shoulder the loan because around half of GM's 50,000 workers in Europe are employed in the country, but Britain, Spain, Poland and Belgium would still be expected to contribute cash at a later stage, the FAZ said.

Story continues below…

Both Magna and RHJ want to cut 10,000 jobs at Opel but Merkel and the state governments where Opel has factories prefer Magna because fewer of the cuts would fall in Germany than under RHJ's proposals, the FAZ said.

Britain's business minister, Peter Mandelson, urged the GM board Thursday to make an objective decision which will secure the long-term viability of both Opel and Vauxhall.

Vauxhall, the British arm of the business which also includes Opel in Germany, employs around 5,000 workers at two sites in Britain.

"The UK government expects the GM Board to take an objective, commercial decision about the future of its European operating divisions," Mandelson said in a written statement to AFP.

"This decision, above all, needs to secure the long-term viability of both Opel and Vauxhall in the UK and should be not be distorted by political considerations in any one country."

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