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GM is ready to keep Opel if EU blocks Magna deal, report says

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GM is ready to keep Opel if EU blocks Magna deal, report says

PAUL MCVEIGH

AUTOMOTIVE NEWS EUROPE

OCTOBER 19, 2009 10:11 CET

MUNICH -- General Motors Co. is ready to keep control of Opel if the European Union blocks the division's sale to Magna International Inc., The Wall Street Journal reported Monday, citing people familiar with the matter.

GM still prefers a sale to Canadian supplier Magna and its Russian partner Sberbank but GM executives are prepared to move to a Plan B if the deal falls through, the newspaper reported.

The plan would mean GM keeping control of Opel and implementing deeper restructuring actions than Magna is planning, including closure or sale of an Opel car factory in Germany, the newspaper said.

Insolvency possible

GM still aims to finalize the sale of Opel unit to Magna and Sberbank, Russia's largest commercial bank, midweek, The Wall Journal Street Journal said, but if forced to go alone, GM would fund Opel's restructuring by seeking government support or by putting Opel into insolvency.

Under intense pressure from Germany where half of Opel's 50,000 employees work, GM last month agreed to sell Magna and Sberbank a 55 percent stake in Opel but the agreement has not yet been finalized.

The European Commission is concerned about a 4.5 billion euro ($6.71 billion) aid package offered by Berlin to Magna to help restructure Opel.

On Friday, EU Competition Commissioner Neelie Kroes wrote to Germany's Economics Minister Karl-Theodor zu Guttenberg and said GM should be allowed to reconsider the bidding process because of indications that an offer of German state aid was made only to Magna's bidding group.

Kroes said such a precondition for aid would be incompatible with EU state aid and internal market rules.

GM's senior management initially favored a rival offer from Belgian investor RHJ International because it offered the chance for the U.S. carmaker to buy back Opel at a later date,

Berlin offers assurances

A European Commission spokesman said on Monday that the German government has given written assurances to GM and the trust established to keep Opel separate from GM's recent bankruptcy that its aid offer for Opel is not tied to the choice of investor or plan.

"Germany has now written to GM and the Opel Trust, giving them the assurance we asked for," spokesman Jonathan Todd said. "The Opel Trust and GM will now have to reconsider in light of these written assurances."

RHJ said it was no longer interested in Opel, having agreed to buy UK wealth management unit Kleinwort Benson from Commerzbank last week.

"We have moved on. Financial services is now our priority," a spokesman said.

Reuters contributed to this report

Edited by NINETY EIGHT REGENCY
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I hope this happens. I want Opel to stay with GM and once the dust settles get rid of CPF.

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Spanish workers reject Magna offer

http://hosted.ap.org/dynamic/stories/E/EU_...EMPLATE=DEFAULT

MADRID (AP) -- A Spanish labor representative says unions have rejected Magna's latest offer concerning the future of an Opel plant targeted for job cuts and will vote on calling a strike.

Jose Juan Arceiz, leader of a committee representing workers at the Opel auto plant near Zaragoza, told AP Monday that talks last week with Magna had yielded progress but unions still felt Magna's offer was not enough. A consortium led by Magna International Inc. agreed in September to acquire Opel from General Motors.

Arceiz said the committee will meet Tuesday to vote on holding protests that could include a strike.

The Opel plant in Zaragoza employs 7,500 people. Magna has said it wants to lay off 1,350 workers and shift part of the factory's production to Germany.

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CPF, you may have won a battle, but you are not going to win the war.

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As much as I'd like to see a 'Canadian' car company, GM needs Opel if it is going to ever regain its global crown. Even as China rises, Europe will be the world's 3rd largest car market and GM cannot afford to be virtually shut out of it. Plus, Opel has done a lot of good things for GM.

I am hoping this is all just smoke and mirror stall tactics on the part of GM to put together its own proposals.

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Something tells me that GM knew this all along...

It was pretty evident, even to us armchair quarterbacks, that Germany was being pretty damn socialist with the whole thing.

I too would like to see Opel stay with GM. But Opel needs to be a division, they don't need the kind of power they had prior to the bankruptcy. GM has made it pretty evident that it can survive WITHOUT Opel entirely.

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Something tells me that GM knew this all along...

It was pretty evident, even to us armchair quarterbacks, that Germany was being pretty damn socialist with the whole thing.

I too would like to see Opel stay with GM. But Opel needs to be a division, they don't need the kind of power they had prior to the bankruptcy. GM has made it pretty evident that it can survive WITHOUT Opel entirely.

Except that, IIRC, Epsilon I and II, Theta-Epsilon, and Delta I and II are platforms Opel had a major hand in the developmental of, and they all underpin very important products.

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Something tells me that GM knew this all along...

It was pretty evident, even to us armchair quarterbacks, that Germany was being pretty damn socialist with the whole thing.

I too would like to see Opel stay with GM. But Opel needs to be a division, they don't need the kind of power they had prior to the bankruptcy. GM has made it pretty evident that it can survive WITHOUT Opel entirely.

I thought the same thing too. I was thinking GM is trying to play this out until they get their house in order. The German election threw a monkey wrench into this, so GM said Magna. The election is over and now the rest of Europe objects to this happening and have agreed to extend aid to Opel now as well. ... hmmm.....

Something to think about.

Yeah... I think they knew this, but new GM is playing a different game than old GM.

I stand by my word. If GM keeps Opel, I will apologize to PCS.

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Except that, IIRC, Epsilon I and II, Theta-Epsilon, and Delta I and II are platforms Opel had a major hand in the developmental of, and they all underpin very important products.

Epsilon was moved to GMNA home base in preparation for the sell. T-E is basically Theta which IIRC is GMNA anyway. And Delta is as much GM-DAT as GME (and will be GM-DAT in the future)

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Not to mention all of these platforms are fresh. GM could easily dump Opel right now and have ample time to engineer replacements elsewhere.

What was that old spiel PCS had about GM wanting to treat Chrysler like a $5 whore? Looks like GM might treat Opel the same way.

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As long as GMNA gets better, the rest will fall into place. Chevy Europe should be the new nucleus of GM Europe with Opel as a division.

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Not to mention all of these platforms are fresh. GM could easily dump Opel right now and have ample time to engineer replacements elsewhere.

What was that old spiel PCS had about GM wanting to treat Chrysler like a $5 whore? Looks like GM might treat Opel the same way.

Hmmmm, what you fail to realize is that almost all the current GM Senior Staff and Senior Management, either came from Opel or has some tie to Opel, even Fritz and Lutz. So what you perceive as the New GM is in fact Opel management taking its rightful place to run the company. Who is left at Opel in Europe are those who got in bed with the German government, I wonder what will happen to them when all is said and done and GM decides to retain Opel ...

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Machiavelli's got nothing on General Motors.

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