GM chief says parties working to sign Opel deal

[October 15, 2009]  INCHEON, South Korea (AP) -- General Motors Co. CEO Fritz Henderson said intense discussions were still under way to complete the sale of its German auto unit Opel, though stopped short of guaranteeing an agreement would be signed this week.

Canadian auto parts supplier Magna International Inc. along with Russia's state-owned Sberbank agreed to buy a 55 percent stake in Opel from General Motors last month, with each taking 27.5 percent. GM is retaining a 35 percent stake and Opel employees will own 10 percent.

Henderson told reporters that GM was "working constructively" with Magna, Sberbank and the German government to try and clinch a deal.

"So it's possible that this could be signed this week," he said. "We're working hard to try to do that. Sitting here today, I can't guarantee it," he said, citing issues that still needed to be resolved. He did not elaborate.

Henderson expressed confidence Tuesday in Shanghai that a signing could take place this week.

The Financial Times reported that GM will announce later Thursday that it has reached agreement to sell 55 percent of Opel to Magna and Sberbank even though it has not agreed with workers in Spain regarding the future of a production line there.

The FT said that binding share price agreements would be signed, citing people with knowledge of the plan. The newspaper did not identify them.

"I really can't confirm whether it would happen today," Henderson said in response to a question on the report. "But I can just say we're pretty much working very, very diligently with our partners to try to finalize it."

Henderson, visiting GM's South Korean operations after a trip to China earlier in the week, indicated he was involved in the effort to reach a deal.

"I was on the phone late last night," he said.

As part of its takeover of Opel, Magna has said it wants to eliminate 1,300 jobs at an Opel plant near Zaragoza in northeast Spain and move one of its two assembly lines to Germany. The factory now employs 7,000 workers.

Spanish unions and Magna representatives have been holding talks. Union representatives walked out of a meeting with Magna on Tuesday in Madrid. Later, Magna made a new proposal that will guarantee production at the Zaragoza plant for 5 to 10 years, according to Spanish Industry Minister Miguel Sebastian.

GM is trying to streamline its operations after spending 40 days in bankruptcy protection this year. The company has received about $50 billion in U.S. government aid under an unprecedented bailout of the American auto industry amid the global financial crisis.

[Associated Press; By KELLY OLSEN]

Associated Press writer Daniel Woolls in Madrid contributed to this report.

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