GM meets to mull offers on Opel's future
AFP · 21 Aug 2009, 08:00
Published: 21 Aug 2009 08:00 GMT+02:00
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.
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."