Crunch time for Opel as Germany mulls takeover offers
The fate of tens of thousands of workers hung in the balance on Wednesday as Berlin prepared a crunch meeting to select its preferred bidder for struggling General Motors subsidiary Opel.autos Updated: May 27, 2009 17:07 IST
The fate of tens of thousands of workers hung in the balance on Wednesday as Berlin prepared a crunch meeting to select its preferred bidder for struggling General Motors subsidiary Opel.
Chancellor Angela Merkel will begin talks at 1900 GMT with top politicians from Berlin and Washington, as well as representatives from the three bidding firms that have placed official bids, Magna, RHJ International and Fiat.
And in a last-minute dramatic twist to the long-running saga, Berlin confirmed it had also received interest from a Chinese firm, reportedly the Beijing Automotive Industry Corporation.
According to Die Welt daily, the Beijing company is seeking less in the way of loan guarantees from Berlin and has pledged not to close any German plants for two years, seen as an attractive proposal in an election year.
Although the final decision lies with GM and the US government, Germany has a major say because it is offering billions of euros (dollars) in loan guarantees and has most of GM Europe's factories and employees.
Germany is manoeuvring to keep as many of Opel's 25,000 German employees as possible four months before the country holds a general election.
The talks are expected to last late into Wednesday night and the decision could yet be postponed unless the bidders improve their offer, business daily Handelsblatt reported.
The paper cites government advisors as saying that a hasty decision would be a "catastrophe."
The frontrunner in the bidding war remains Canadian auto parts giant Magna International -- backed by Russia's top bank, the state-controlled Sberbank -- which would see Russian truck maker GAZ making Opel vehicles in Russia.
Premiers of states where Opel has its main factories have come out clearly in favour of Magna, as have unions, while centre-left members of the governing coalition are also thought to favour the Canadian solution.
But advisors cited by Handelsblatt criticised the Magna offer for not bringing sufficient funds to the table. If the bid were accepted "the new company would be insolvent from day one," the experts were quoted as saying.
For its part, Italian car giant Fiat seeks to combine GM's European and Latin American operations with Chrysler, in which it holds a 20 percent stake, to create the world's second largest automaker after Japan's Toyota.
But the Italian bid fell foul of Opel's powerful union bosses as details leaked out of sweeping job cuts. Fiat boss Sergio Marchionne held last-gasp talks with Merkel on Tuesday to push his offer.
He has said Fiat would cut 10,000 jobs across Europe, including just 2,000 in Germany with no plant closures.
Brussels-based RHJ International, the third bidder, owns stakes in auto parts firms including Niles and Asahi in Japan, Belgium's Honsel, as well as Columbia Music Entertainment.
Economy Minister Karl-Theodor zu Guttenberg has also raised the possibility of declaring Opel insolvent but the government has stressed this is a last resort and would prefer to find an investor.
GM, which also owns Vauxhall in Britain and Saab in Sweden, is racing against a June 1 deadline to come up with restructuring measures that would convince the US Treasury to keep it afloat with billions of taxpayer dollars.