Sunday, August 30, 2009
Uncertainty over GM sale of Opel
US carmaker General Motors could be set to reverse its decision to sell its struggling European car firm Opel, according to media reports.
Last week, the German government said it would lend Opel 4.5bn euros ($6.4bn; £3.9bn) if its favoured suitor, Magna, was chosen to take it over.
The bid from the Canadian car parts maker is backed by Russia's Sberbank.
But reports in the UK and US say GM is trying to raise rescue funds for Opel from the US and European governments.
At the weekend, GM postponed making a decision on who should buy the Opel division, which includes Vauxhall in the UK.
As well as Magna, Belgian financial group RHJ has also been a suitor of Opel.
However, Magna has publicly promised to cut fewer jobs in Germany, where 25,000 people are currently employed in the division.
The German government said GM's chief negotiator, John Smith, was due to have talks with deputy economy minister Jochen Homann and other members of the government's "Opel task force" in Berlin on Tuesday.
The carmaker has not commented on the fate of Opel, but the German government has called on the US government, which owns more than 60% of GM, to try to speed up the Opel sale process.
Broker?
When GM filed for bankruptcy protection on 1 June, it handed over control of Opel to a German-led trust., which will have to approve any solution.
The Opel Trust board has two GM representatives and two for Germany - one for Berlin and one delegate for the four federal states in which Opel has a plant.
There is a fifth "neutral" board member - Fred Irwin, president of the American Chamber of Commerce in Germany - but he has no vote. He may, however, be forced to try to broker a deal, analysts say.
GM, once the world's largest carmaker, struck an outline deal with Magna in May, days ahead of seeking bankruptcy protection.
In July, GM emerged from Chapter 11 bankruptcy with a number of new US government-appointed board members.
On Monday, the White House said that President Barack Obama's "view is that decisions made about the day-to-day operations at General Motors should be made by the folks at General Motors".
DATED: 30.08.09
FEED: AW
