Waiting game

The German government, which provided a 1.5-billion-euro ($2.2-billion) emergency loan to keep Opel solvent, has been pressuring GM to choose a buyer for its European unit as soon as possible.

German Economics Minister Karl-Theodor zu Guttenberg told the Hannoversche Allgemeine Zeitung on Tuesday that he hoped GM would lay out a clear course of action before the IAA International Motor Show opens in Frankfurt on Sept. 17.

But the Handelsblatt financial daily quoted sources close to the Opel talks as saying GM is likely to postpone its decision again and wait until after the German federal election on Sept. 27 before making any announcement.

Negotiations on Opel have already gone on for months, with issues of state funding and potential job losses turning the sale into a political hot potato ahead of the election.

Berlin's favored bidder is Canadian auto parts maker Magna. Chancellor Angela Merkel and the German states think the company's experience in the car industry puts it in a better position to save more of the 25,000 Opel jobs based in Germany.

But GM has signaled it would prefer to sell its European unit to Belgian-based investment group RHJ International, or perhaps even keep the business for itself.

Retaining control

The head of a pro-business group in Chancellor Merkel's Christian Democratic Union, Kurt Lauk, said GM is unlikely to sell Opel to Magna because Detroit didn't want to pass valuable intellectual property on to Magna's Russian partner Sberbank.

“Should the Russians become co-owners of Opel, they'll get much quicker access to GM's small-car technology,” Lauk told Bloomberg news agency on Tuesday. “I'm convinced that would pose a fundamental problem to the new board.”

Lauk, who is also a former board member of DaimlerChrysler and Audi, said it would be “commercially wise” for GM to dismiss both bids and keep Opel for itself, using a “restructuring plan” to secure the US giant's presence in the European and Russian markets.

Softening stance?

Recent media reports suggest the German government may have softened its stance on the prospect of GM retaining control of Opel.

Last week an unnamed German government source told Dow Jones Newswires that Berlin would be open to GM keeping Opel, as long as it invests its own capital in the company.

German Deputy Economy Minister Jochen Homann said Tuesday that GM would need to present a robust business strategy if it wanted to keep Opel.

"'We are keeping Opel' is not a strategy yet," he said on the sidelines of an energy conference.

"We have laid the groundwork in the direction of Magna," Homann said, reiterating the German government's support for a deal with Magna.

sje/AFP/dpa/Reuters
Editor: Kate Bowen