Sunday, August 30, 2009
GM delays decision on Opel future
The Detroit-based firm said directors had met on Friday to discuss the options but "no decision was taken".
An assessment on whether to start exclusive talks to buy German-based Opel had been expected at the weekend.
The race to control Opel is between the Canadian component manufacturer Magna and Belgian financial group RHJ.
The BBC understands that a number of stumbling blocks have emerged to delay the final decision.
The German government - which has openly preferred the bid from Magna and has offered it bridging finance of 4.5bn euros ($6.4bn, £3.9bn) - is thought to have added further conditions to that support.
Magna has publicly promised to cut fewer jobs in Germany, where 25,000 people are currently employed in the division.
Buy-back option
Germany's economy minister said he regretted the failure to make a decision.
Karl-Theodor zu Guttenberg was also quoted as telling the online edition of the Hamburger Abendblatt newspaper that "there is still room for an agreement".
UK Business Secretary Lord Mandelson has been critical of German Chancellor Angela Merkel for politicising the bidding contest ahead of federal elections in the country, at the end of September.
Earlier this week Lord Mandelson said GM needed to look for an "industrial outcome based on the long term viability" of Opel.
Lord Mandelson has also said he would stand by the UK carmaking industry - in particular Vauxhall, which employs more than 5,000 people directly in its plants in Ellesmere Port, Cheshire, and Luton, Bedfordshire.
He did not specify what level of financial support, if any, would be provided and he has also warned there would be some job losses irrespective of who gains control of Vauxhall.
There is also speculation that GM, which only recently emerged from Chapter 11 bankruptcy with a host of new US government-appointed board members, may prefer to exercise a buy-back option in the future.
That could see it re-acquiring Opel and Vauxhall within a few years at an advantageous price - an option which may be unpalatable to any potential buyers.
German media has also reported that GM may be also toying with the idea of placing Opel into insolvency, though that was played down on Saturday by a spokesman for the US company.
DATED: 30.08.09
FEED: AW
