Opel's future

German Chancellor Angela Merkel said she expected progress over the issue within the next week, after GM on Friday postponed its long-awaited decision regarding Opel.

"I regret that a final decision wasn't made, but I hope it will happen soon, because both for the workers and the economic situation at Opel, we urgently need a decision," Merkel told German public television in an interview to be aired on Sunday, Aug. 23.

General Motors, which emerged from bankruptcy in July and is now majority-owned by the US government, has two takeover offers on the table - one from Canadian auto parts maker Magna International with backing from Russian state bank Sberbank, and another from the Brussels-based investment group RHJ International.

The German government has offered substantial financial backing for Magna's bid, which it sees as the best option to save jobs at Opel. Both Magna and RHJ plan to cut around 10,000 jobs across Europe but Berlin hopes that with Magna fewer jobs would be lost within Germany.

Pushing the case in Washington

German Foreign Minister Frank-Walter Steinmeier has contacted US Secretary of State Hillary Clinton to press Berlin's case. Steinmeier said in a statement that he had "emphasized that after several months of intensive negotiations, the time had now come for a decision."

"The workers at Opel deserve clarity and a credible prospect for the future," he said, calling for a decision "that safeguards the future of all Opel factories and as many jobs in Germany as possible."

Opel has around 25,000 people employed at four plants in Germany and the government in Berlin is worried that RHJ might decide to close one of the sites.

The Magna bid suggests that 55 percent of the new Opel would be held by Magna and Sberbank. 35 percent would remain with GM and 10 percent would go the employees.

GM however is believed to favor RHJ over Magna as the US company is concerned about becoming a minority shareholder in the new set-up and losing its technology and know-how to Russia.

Election issue

Germany is headed for general elections on Sept. 27 and the future of Opel is likely to become an issue in the election campaigns.

Steinmeier currently heads the Social Democrats as junior partners in an uneasy grand coalition with Merkel's Christian Democrats. The two parties have positioned themselves as rivals in the run-up to September's vote.

German economics minister Karl-Theodor zu Guttenberg also urged GM to not drag out the decision on Opel. He said the negotiations had to be picked up "as soon as possible."

"None of the sides involved in this have any interest in looking like they're scheming to drag out talks," he said.

ai/AFP/dpa/Reuters/AP

Editor: Toma Tasovac