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Union: GM may announce fate of Opel today
(China Daily)
Updated: 2009-08-26 07:54
FRANKFURT: General Motors may make clear today whether it wants to keep its European carmaker Opel rather than sell it, a German labor representative said yesterday. Armin Schild, IG Metall's leader in the state of Hesse where Opel has its headquarters, said the fact that GM's options for Opel had come to light ahead of an official announcement could mean that they were under serious consideration. "I see that as a bad sign for the future of Opel," Schild told German television station ZDF. Sources with knowledge of the deliberations told Reuters on Monday GM was considering a plan to raise $4 billion to keep Opel rather than selling the unit to one of two bidders - Canadian auto group Magna or Belgium-based RHJ International. GM's chief negotiator in the sale of Opel was due yesterday to meet a task force created by the German government to discuss the US carmaker's plans for the European unit, a German politician said. Germany's deputy Chancellor Frank Walter Steinmeier said on the sidelines of an event in Essen, Germany, that he hoped some points could be cleared up in the talks with John Smith. GM decided earlier this year to spin off Opel, its unit for some 80 years, saying it needed billions of euros in state aid to avert job cuts and site closures. The possible reversal of that plan comes against a backdrop of escalating labor tension and political pressure over GM's slow-moving effort to sell control of Opel and British affiliate Vauxhall. Talks to sell Opel have gone on for months and have become a political hot potato ahead of German elections in September, because of the state support involved and the thousands of job cuts expected to follow any sale. German Chancellor Angela Merkel and German states have been putting pressure on GM to pick Magna's offer, made together with Russian partner Sberbank, because they think Magna would can save more jobs. In Germany, Opel employs over 25,000 in four major plants making everything from three-door Corsa subcompacts to Zafira vans. In the UK there are two factories producing automobiles under the Vauxhall badge. Opel has other facilities in Belgium, Poland and Spain. Raising money GM's board was expected to pick a buyer for Opel at a meeting on Friday, but the US carmaker's directors declined to endorse a sale to either party, prompting unions to threaten "spectacular measures" to force a decision. German newspaper Die Welt yesterday cited German government sources as saying GM still wants to clarify with Magna some remaining issues related to Opel's intellectual property, its patents and licenses. The Obama administration pledged on Monday to stay out of GM's choice of a buyer for Opel, while union leaders in Germany put more pressure on the US automaker to make a decision. Because GM is barred from using funding from the US government to support its international operations, one of the options could include raising money by selling or mortgaging the automaker's assets in China, one source said. "By not selling Opel/Vauxhall, GM has essentially two options - providing 3 billion euros ($4.3 billion) to continue operations (less than the 4.5 billion promised by the German government) or liquidation," said credit analysts at UniCredit. Berlin and the German states which host Opel plants have made clear they want Magna to get Opel and are set to provide 4.5 billion euros in state aid to make it happen. Germany has already provided 1.5 billion euros in bridge financing for Opel. As a result, German trustees overseeing a majority stake in Opel have to approve any deal after it clears the GM board. Opel and its sister brand Vauxhall sold just over 560,000 cars in Europe in the first half of the year, giving a market share of 7.6 percent, according to data compiled by the ACEA auto industry association. 'Bells and whistles' "Dialogue will continue this week amid bells and whistles by the unions," said Fred Irwin, chairman of the German government-backed trust created to facilitate a sale, adding that "everyone loses" if Opel becomes insolvent. German unions and Merkel favor a deal with Magna, Canada's largest auto-parts manufacturer. GM can't afford to retain control of its Opel division because the carmaker needs to concentrate on the US, according to Irwin. Merkel said it's "regrettable" that GM's board took no decision on a buyer for Opel when it reviewed bids on Aug 21. "Every day counts for workers and for the economic situation" of Opel, Merkel said. Reuters-Bloomberg News (China Daily 08/26/2009 page17) |
