Magna, GM in talks on Opel
BERLIN (AP) ó General Motors Corp. and Canadian auto parts maker Magna, a suitor for GM’s Opel unit, were negotiating Friday on “new ideas” from the bidder, Germany’s economy minister said as top officials gathered for more high-level talks on a rescue deal for Opel.
The German government was to convene its second round of negotiations on the future of Opel after talks snagged Thursday over new short-term funding needed to move Opel into an independent legal structure.
The other suitor for Opel, Fiat Group SpA, stayed away from the talks, saying that it faced “unreasonable” funding demands ó but CEO Sergio Marchionne stressed that Fiat was not withdrawing its bid.
Germany is looking for an agreement that will shield Opel ó which employs 25,000 people in Germany, nearly half GM Europe’s work force ó from a looming GM bankruptcy court filing in the U.S. and extensive restructuring.
The government wants to make it legally independent under a trustee so that any taxpayer assistance does not go to the U.S., then would provide bridge financing while Opel looks for a new, permanent owner.
“There are new ideas from Magna ó they are still being negotiated with GM and, at the same time, being examined by us,” Economy Minister Karl-Theodor zu Guttenberg told reporters outside the chancellery. He did not elaborate.
He said it was unclear whether the talks would lead to a decision on Friday, but “if people say that we will have a solution in the next one or two hours, that doesn’t have to be the case.”
Aurora, Ontario-based Magna International Inc. is leading a bid for a majority of Opel from a consortium that also includes Russian lender Sberbank.
Talks involving Chancellor Angela Merkel and other top officials appeared set to go ahead late in the day despite initial doubts over whether there would be anything to discuss.
“I expect there to be a result today,” said Juergen Ruettgers, the governor of North Rhine-Westphalia state ó one of four in Germany that has Opel plants.
A government official, speaking on condition of anonymity because no official announcement had been made, said the meeting was expected to go ahead starting at about 6 p.m. (1600GMT), two hours later than originally expected. The reason for the delay was unclear, as was exactly who would attend.
GM Europe chief Carl-Peter Forster was seen going into the chancellery.
Asked if she could rule out an Opel bankruptcy filing, Merkel was quoted Friday as telling the weekly Der Spiegel that “we are doing everything to find a different solution. But a direct state holding in Opel does not come into question for me.”
A previous attempt to secure Opel’s future stalled on Wednesday night. German officials blamed short-term financing needs they said were brought up by GM totaling euro300 million ($418 million) for preventing a decision then. The government has offered euro1.5 billion in bridge financing.
The government wanted bidders and GM to come up with an agreement on covering the short-term financial needs before Friday’s meeting.
While Magna has previously indicated it would be willing to provide the additional funding, Marchionne said Fiat had decided to pull out of the continuation of the talks Friday because of the requirement for the emergency funds
Marchionne said it was “unreasonable” to expect Fiat to provide such funding because it had not yet had full access to Opel’s financial records and could not determine “its precise financial condition and thus properly frame a merger proposal that would be fair” to both sides.
“The emergency nature of the situation cannot put Fiat in a position to take on extravagant risks,” he said in a statement.
Taking over GM’s European operations, including Opel and Britain’s Vauxhall, is a key part of Marchionne’s strategy of creating a car company with the capacity to produce 6 million cars a year, the threshold he says is necessary for an automaker to survive.
Fiat is on the verge of taking control of a 20 percent stake in Chrysler, pending the completion of restructuring in bankruptcy court in New York.
Separate to the Berlin talks, the European Commission was hosting talks among ministers to coordinate government efforts to save GM’s European operations.
Opel and sister brand Vauxhall also have operations in Belgium, Spain and Poland among other countries. GM officials will not be present.