The future of General Motors' European operations, Opel, which could impact on thousands of jobs in Britain, should be decided by the middle of this week, German officials saidtoday. The stricken carmaker is in the process of selling a majority stake in Opel, including Vauxhall in the UK, and has attracted three bidders.
Chancellor Angela Merkel told reporters in Berlin that her government hoped to make progress before a likely bankruptcy of GM in the United States at the beginning of next week. Although the final decision lies with GM in Detroit, the German government, which is expected to support the winner with billions of euros in state aid, is playing a key role. "You can expect the need for decisions to reach a kind of climax around mid-week," she said. "What we do not want is to end up in a situation where we practically become appendages of possible Chapter 11 proceedings (US bankruptcy) or something similar."
The three bidders for Opel are the Italian auto firm Fiat, the Canadian car-parts manufacturer Magna with Russia's Sberbank, and Brussels-based investment firm RHJ International. Magna had been described as the favourite, although German ministers said at the weekend that Fiat had improved its bid. Merkel seemed to indicate that the horsetrading was still ongoing. "In the last few days, we've seen the offers by the different investors changing day-by-day, and also the statements by GM and the American government in terms of what they can envisage," she said.
Ministers rushed to play down the comments from economy minister Karl-Theodor zu Guttenberg over the weekend, who said that insolvency might be the best option for Opel. A spokesman for Merkel said it was the government's aim to keep all four plants in Germany open and to prevent an insolvency.
Both Magna and Fiat are expected to cut around 10,000 jobs if they win the auction, but with financial aid coming from Berlin they are unlikely to make deep cuts at the four Opel plants in Germany, which employ 25,000. There are 5,000 people employed at Vauxhall plants in Luton and Ellesmere Port in Merseyside, and business secretary Peter Mandelson has appealed to the German government to ensure that British jobs get a fair treatment, although there are fears his plea may have fallen on deaf ears.
GM in Detroit has been given a deadline by Washington of 1 June – next Monday - to restructure its debts or file for bankruptcy, in what would be one of the largest industrial bankruptcies that the US has seen.
A spokesman for Merkel said she had discussed Opel in a telephone conversation with Russian prime minister Vladimir Putin on Saturday and met with officials from Magna on Sunday. She is scheduled to meet Fiat boss Sergio Marchionne in the next few days.
