Clouds gather over delayed Opel deal
Published on: 23 Oct 2009 18:07 CET
GM vice president John Smith said in a statement that the final signing of a 55-percent stake in Opel to the Canadian group Magna might be authorised at
a GM board meeting on November 3.
The long-awaited final decision had been expected this week, the latest date in a string of postponements since GM agreed in May to sell the stake to Magna and its Russian partner, the state-owned Sberbank.
A report in the online edition of the magazine Der Spiegel on Friday said meanwhile that GM did not want to sign the deal after all, but wanted to
restructure Opel itself with the help of German state aid.
EU regulators last week cast doubt on the deal, saying there were "significant indications" that German aid for the deal had been proffered only if Magna and Sberbank won the bid.
Smith said GM directors would discuss a new letter from German Economy Minister Karl-Theodor zu Guttenberg, which said German aid for the deal was available to all bidders, and not just to Magna. Outstanding issues involving GM and Magna would also be taken up by the board, Smith added.
"Given the significance of the Opel transaction, GM's board will soon meet in its regularly monthly meeting (November 3) to consider Minister zu Guttenberg's letter and changes to the Magna/Sberbank proposal," said Smith, who is GM's lead negotiator for the deal.
Work would also continue to "complete all preparations for the signing of binding agreements should that be authorised by GM's Board at the November 3 meeting," he added.
In his letter, Guttenberg urged GM to detail its decision to sell the stake to Magna, in effect putting pressure on GM to ease concerns expressed by the EU Commission. The German minister also pressed GM to come to a final decision on the sale and to provide written confirmation of that decision.
GM has agreed in principle to the sale, but the EU commission is concerned that €4.5 billion ($6.7 billion) in promised German aid was only available to Magna, which would violate EU competition regulations.
Der Spiegel said important members of the GM board now opposed the sale and were banking on getting the German aid to restructure Opel itself.
The on-again, off-again saga has dragged on since GM first mooted an Opel sale in February, with the fate of at least 10,500 of GM Europe's workforce of about 50,000 hanging in the balance. That is the number of jobs Magna says it would cut, while GM is believed set to eliminate more if it manages the ailing car maker's restructuring.
Opel works committee head Klaus Franz said the latest delay was the last straw.
"With this, GM has lost the last bit of trust from European politicians and employees," Franz said in a statement.
But Spanish Opel workers showed this week they did not trust Magna either, calling for a strike to press demands that the Canadian group reduce the number of mooted job cuts at an Opel plant in the northern city of Figueruelas.
Workers in Belgium, Britain, Poland and Spain have slammed Magna's decision to maintain all German factories in operation, charging that more efficient plants would suffer because Berlin is stumping up state aid.
Berlin has asked other European countries to contribute to the rescue package as well.