Opel decision may come from GM board meeting

[September 08, 2009]  FRANKFURT (AP) -- General Motors Co.'s board begins a two-day meeting in Detroit Tuesday that could see it decide the fate of its European unit Opel, an outcome German business leaders and politicians hope preserves thousands of jobs.

Opel spokesman Frank Klaas said Opel did not have any comment on the meeting, while GM Europe officials in Zurich, Switzerland, where the company is based, did not immediately respond to requests for comment.

GM, which has repeatedly delayed a decision, has two bids for Ruesselsheim-based Adam Opel GmbH to choose from, with German officials, Opel workers and unions repeatedly -- and loudly -- declaring support for the offer from Canadian auto parts maker Magna International Inc. and Russian state-backed bank Sberbank. Magna has pledged to preserve more jobs and not close the four Opel plants in Germany, something officials say gives its bid an advantage.

The other bid is from RHJ International, a Brussels-based investment house, which has not guaranteed to keep as many jobs in Germany and could sell the unit back to GM at a later date.

Opel employs 25,000 people in Germany, about half of GM Europe's total work force, and German politicians are keen to safeguard jobs ahead of national elections Sept. 27.

The German government has provided euro1.5 billion ($2.14 billion) in bridge loans to Opel and has offered a further euro4.5 billion in credit to support the Magna bid.

Under the terms of the Magna bid being discussed, Magna and Sberbank would get a 55 percent stake in Opel. GM would hold onto a 35 percent stake and Opel workers would get 10 percent.

Just ahead of GM's bankruptcy earlier this year, Opel was transferred to a government-backed trust that holds 65 percent of the automaker, with GM holding 35 percent.

Meanwhile, GM seems to have leaned more toward the bid from RHJ International.

RHJ sweetened its offer last week, agreeing to provide euro300 million in cash compared to euro275 million offered earlier and would expect loan guarantees of euro3.2 billion from the government, down from euro3.8 billion.

Last month GM's board declined to choose between Magna's and RHJ's original bids, raising speculation that it might not want to sell the unit at all in order to keep its technologies from falling into competitors' hands and to keep Opel engineers under the GM umbrella.

According to press reports, Economy Minister Karl-Theodor zu Guttenberg wants an indication on the matter from GM before next week's start of the Frankfurt Auto Show.

Opel builds popular models like the Insignia sedan, which was voted the 2009 European Car of the Year by a panel of automotive experts. Opel engineers are also integral to GM's overall global strategy.

Ferdinand Dudenhoeffer, at the Center of Automotive Research at the University of Duisberg-Essen, recently said Opel doesn't have good chances for success continuing as a unit of GM. He said the delayed decision has also angered Russia, and General Motors may therefore have to count on giving up some of its business in that strategic market. GM's Chevrolet brand is popular in Russia, for example.

___

On the Net:

http://www.opel.com/

http://www.gm.com/

[Associated Press; By GEORGE FREY]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.