GM reportedly mulling options if Opel deal fails
AFP · 19 Oct 2009, 10:19
Published: 19 Oct 2009 10:19 GMT+02:00
"While the automaker continues to prefer a sale to Magna, GM executives are prepared to move to its Plan B if that deal should fall through," the paper said, citing people familiar with the matter.
The backup plan calls for GM keeping control of Opel and implementing deeper restructuring than the proposed buyers, Canadian auto parts maker Magna International and Russian state-owned lender Sberbank, are planning, the report said.
If forced to act alone, GM would fund the overhaul, which includes far more drastic headcount reductions, by soliciting government support or putting Opel into insolvency, the paper added.
GM on September 10 announced a preliminary plan to sell a 55-percent stake in Opel, with GM retaining 35 percent and employees 10 percent, a deal backed by €4.5 billion ($6.7-billion) in state aid promised by Germany.
But EU Competition Commissioner Neelie Kroes last week questioned German public aid to support the transaction, saying there were "significant indications" that it was contingent on Magna winning the bidding for Opel. Making state aid contingent on one particular buyer gaining control of Opel would violate EU competition rules.
A final deal was meant to be inked last week but has been postponed.
The car maker employs some 25,000 people in Germany, about half of its total European workforce along with sister brand Vauxhall in Britain. Magna is reported to planning 10,500 job cuts across Europe.