GM looks at shelving Germany's Opel plan: report
General Motors is considering shelving a German-backed bailout of its European arm Opel amid fears that long-running talks on the deal will end in failure, a report said on Tuesday.autos Updated: Aug 25, 2009 08:41 IST
General Motors is considering shelving a German-backed bailout of its European arm Opel amid fears that long-running talks on the deal will end in failure, a report said on Tuesday.
The US automaker is studying a plan to raise 4.3 billion dollars (2.6 billion pounds, 3 billion euros) in rescue funds for the loss-making Opel from the US and European governments besides Germany, the Financial Times said.
Funds could be raised from the British and Spanish governments, the FT said.
"Germany have expressed interest in having Magna, but there might be other (financing) sources," an unnamed source familiar with GM's plans was quoted saying.
"This is what we are currently exploring."
Germany, where around half of GM's 50,000 European employees work, had hoped that GM executives would choose on Friday an offer for Opel from Canadian auto parts maker Magna and state-owned Russian lender Sberbank.
GM's board is widely believed to prefer a rival bid from Brussels-based investment group RHJ International, reportedly because of fears that valuable technological knowhow might end up in the hands of Russian carmakers.
GM, which is majority owned by the US government since the firm's bankruptcy in June, is also said to find RHJ more attractive because it would make a repurchase of Opel easier when times get better.
German Finance Minister Peer Steinbruck said Monday this was now the case and warned there would be no German government aid for RHJ.
The Wall Street Journal reported that GM was trying to develop a 4.3 billion dollar financing plan that would allow it to keep control of Opel.
Such a move would allow GM to circumvent plans to sell control of Opel and its British affiliate, Vauxhall, which form the core of the company's European operations, the Journal said.