Germany Could Agree To GM Retaining Opel

[megeebee]

FROM AUTOMOTIVE NEWS:

Germany could agree to GM keeping Opel, report says

Automotive News | October 27, 2009 - 2:01 pm EST

FRANKFURT (Reuters) --
German Chancellor Angela Merkel's new partners, the FDP, are skeptical of the planned sale of Opel to Magna.


Germany's new government will take a fresh look at the planned sale of General Motors' Opel unit, and may consider an arrangement where the carmaker remains within GM, a newspaper reported today.

"The new government will take another look at decisions made up to now on Opel and imminent conditions to be set by the European Commission," Opel Trust member Dirk Pfeil told the Frankfurter Allgemeine Zeitung.

"The result could be a solution where Opel stays completely within the General Motors group," added Pfeil, who is a member of the Free Democrats (FDP), coalition partners to Chancellor Angela Merkel's conservatives in the German government that will be sworn in on Wednesday.

Pfeil has repeatedly voiced objections to the planned sale of a 55 percent stake in Opel to Magna International Inc. and its Russian partner Sberbank. Pfeil abstained from backing the deal when the trust approved it last month.

The trust comprises German government-appointed members and GM executives and has a 65 percent stake in Opel. The stake is collateral for 1.5 billion euros in state aid provided by the German government earlier this year to keep Opel afloat when GM went into short-lived bankruptcy. GM has 35 percent stake.

GM's Plan B

GM's board of directors is due to meet on Nov. 3 to reconsider Opel's sale to Magna after competition authorities in Brussels expressed concerns about the fairness of the bidding process.

On Oct. 19, The Wall Street Journal said GM is ready to keep control of Opel if the European Union blocks the division's sale to Magna.

GM still prefers a sale to Canadian supplier Magna and its Russian state lender Sberbank but GM executives are prepared to move to a Plan B if the deal falls through, the newspaper reported.

The plan would mean GM keeping control of Opel and implementing deeper restructuring actions than Magna is planning, including closure or sale of an Opel car factory in Germany, the Journal said.

GM's senior management initially favored a rival offer for Opel from Belgian investor RHJ International because it offered the company the chance to buy back Opel at a later date.

Under intense pressure from Germany where half of Opel's 50,000 employees work, GM last month agreed to Magna's Opel bid but the deal has not yet been finalized.

EU worries

The European Commission has been keeping a close eye on the Opel transaction to ensure state aid is not misused for political purposes.

Magna had won approval from Berlin by proposing to keep all four Opel plants in Germany open. The German government has pledged 4.5 billion euros to help restructure Opel's loss-making operations.

An Opel Trust member contacted by Reuters on Tuesday said the trust was awaiting the GM board decision. "We don't know what will happen there," the member added, declining to be named.

Dealers support Magna

Opel dealers' association EURODA, meanwhile, is pushing for the sale of Opel to Magna as soon as possible.

"Waiting much longer might hurt confidence in the future we so eagerly want to focus on," EURODA Chairman Jaap Timmer wrote to GM CEO Fritz Henderson in a letter obtained by Reuters.

Merkel's new partners, the FDP, are broadly skeptical of the planned sale of Opel to Magna, but party member Rainer Bruederle, who is set to be sworn in as economy minister on Wednesday, has said there is no way the new government can stop the sale.

SOURCE: http://www.autonews.com/apps/pbcs.dl...plate=printart

[-World Class-]

Like so many others, I really hope they end up keeping it.

[zete]

This just seems to be sliding towards "GM can keep it" territory. All that posturing by Merkel et al out the window. She needs that coalition, and it's obvious her partner has little time for this. Probably easier to just hand GM the money and be done with it rather than introduce a whole bunch of new players right now.

I now figure we'll hear GM will keep it after their board meeting next week. Germany will grudgingly accept. The EU will say all is cool. GM starts the restructuring of Opel that's truly needed. And life continues in this latest incarnation of the carpocalypse.

[AMERICA 123]

Outstanding.

Lets hope this comes to pass.

[Elvisuperman]

More good news.

[YupYupYup]

Told you so... ;-)

[mbukukanyau]

I hope the US government is working on this behind the Scenes. This is crutial to GM's global footprint and its long term competitiveness.

[Burnout Czar]

Absolutely outstanding!!! A properly restructured Opel will significantly add to GM's bottom line.

[howey]

I've always thought GM would end up keeping Opel.

[rsbaker]

I don't know what bankruptcy law is like in Europe but it surely would be nice if GM could do a quick rinse bankruptcy like they did here in the US and have Opel start from scratch with little or no debt. GM could close or sell the factories it no longer needed and still retain all intellectual property. a little short term pain for long term health and profitability.

[Bravada]

I hope the US government is working on this behind the Scenes.

It's more about the Free Democrats (liberals) not being very much into state intervention. And they have a right to be listened, they've gained the most in the last election.

[JBsZ06]

German government is a lot more protectionist of its union labor workers than america..

this won't allow GM do what they did here in the USA.

I hope GM can keep control of Opel.

[AdmiralViscen]

Originally Posted by Bravada

And they have a right to be listened, they've gained the most in the last election.

It'd be nice if that concept worked on this side of the pond.

[web_captain]

Once more it's useful to remember that GM has been practically blackmailed by Germany's gov.t: forced to accept the 'political' solution only and only with Magna & Russians.
And as per EU rules this situation can't be tolerated.
Furthermore IMHO it's inconceivable to see a deal with GM in minority, say less than 50%.

[Ed Arcuri]

Originally Posted by Bravada

It's more about the Free Democrats (liberals) not being very much into state intervention. And they have a right to be listened, they've gained the most in the last election.

!We have a winner!
Although Merkel's party lost a bit, her more conservative coalition partner gained.
Elections have consequences.
Cheers,
Ed