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Germany could agree to GM keeping Opel, report says


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Germany could agree to GM keeping Opel, report says

OCTOBER 27, 2009 - 2:01 PM ET

UPDATED: 10/27/09 3:40 P.M. ET

FRANKFURT (Reuters) -- Germany's new government will take a fresh look at the planned sale of General Motors' Opel unit, and may consider an arrangement where the carmaker remains within GM, a newspaper reported today.

"The new government will take another look at decisions made up to now on Opel and imminent conditions to be set by the European Commission," Opel Trust member Dirk Pfeil told the Frankfurter Allgemeine Zeitung.

"The result could be a solution where Opel stays completely within the General Motors group," added Pfeil, who is a member of the Free Democrats (FDP), coalition partners to Chancellor Angela Merkel's conservatives in the German government that will be sworn in on Wednesday.

Pfeil has repeatedly voiced objections to the planned sale of a 55 percent stake in Opel to Magna International Inc. and its Russian partner Sberbank. Pfeil abstained from backing the deal when the trust approved it last month.

The trust comprises German government-appointed members and GM executives and has a 65 percent stake in Opel. The stake is collateral for 1.5 billion euros in state aid provided by the German government earlier this year to keep Opel afloat when GM went into short-lived bankruptcy. GM has 35 percent stake.

GM's Plan B

GM's board of directors is due to meet on Nov. 3 to reconsider Opel's sale to Magna after competition authorities in Brussels expressed concerns about the fairness of the bidding process.

On Oct. 19, The Wall Street Journal said GM is ready to keep control of Opel if the European Union blocks the division's sale to Magna.

GM still prefers a sale to Canadian supplier Magna and its Russian state lender 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 Journal said.

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

Under intense pressure from Germany where half of Opel's 50,000 employees work, GM last month agreed to Magna's Opel bid but the deal has not yet been finalized.

EU worries

The European Commission has been keeping a close eye on the Opel transaction to ensure state aid is not misused for political purposes.

Magna had won approval from Berlin by proposing to keep all four Opel plants in Germany open. The German government has pledged 4.5 billion euros to help restructure Opel's loss-making operations.

An Opel Trust member contacted by Reuters on Tuesday said the trust was awaiting the GM board decision. "We don't know what will happen there," the member added, declining to be named.

Dealers support Magna

Opel dealers' association EURODA, meanwhile, is pushing for the sale of Opel to Magna as soon as possible.

"Waiting much longer might hurt confidence in the future we so eagerly want to focus on," EURODA Chairman Jaap Timmer wrote to GM CEO Fritz Henderson in a letter obtained by Reuters.

Merkel's new partners, the FDP, are broadly skeptical of the planned sale of Opel to Magna, but party member Rainer Bruederle, who is set to be sworn in as economy minister on Wednesday, has said there is no way the new government can stop the sale.

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What I want to see will happen, trust me! There is someone I want to make hurt like a 5 dollar whore with the clap. Their suffering will be legendary, Opel is a way to a means, just as Holden is for me now ...

So what is that? Also you mentioned Pontiac could be coming back after Fritz, is this true?

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