GM still wants to sell Opel

26th August 2009, Comments 0 comments

The German government wants GM to sell Opel, which includes all GM's European operations including Vauxhall in Britain but not Saab in Sweden, to Canada's Magna and Russian state-owned lender Sberbank.

Berlin -- General Motors still wants to sell its European subsidiary Opel, German government sources said Tuesday after talks in Berlin and following reports that the US giant was considering keeping the unit.

"GM's management made clear today (Tuesday) that they are still interested in finding an investor," one of the sources said.

The talks however "made it clear that there is still a considerable need for clarification in GM's board" on the German government position, the source said.

The talks between GM negotiator John Smith and Jochen Homann, head of Berlin's "Opel Task Force" and deputy economy minister, came after news reports said GM wanted to shelve plans for a sale.

Other sources confirmed that several members of the board were indeed in favour of this option.

The Wall Street Journal reported on Monday that GM was trying to develop a 4.3-billion-dollar financing plan allowing it to do so, while the Financial Times said that GM would raise the cash from US and other European governments.

Another option to be considered, "albeit remote," the Wall Street Journal said, is the potential liquidation of the Opel business.

The German government wants GM to sell Opel, which includes all GM's European operations including Vauxhall in Britain but not Saab in Sweden, to Canada's Magna and Russian state-owned lender Sberbank.

Around half of Opel's 50,000 workers are in Germany -- where elections take place on September 27 -- and Berlin believes that Magna and Sberbank would cut fewer jobs in Germany than rival suitors RHJ International.

The board of GM, which emerged from bankruptcy protection last month with the US government owning a majority stake, is widely believed to prefer Brussels-based RHJ.

A board meeting on Friday failed to choose a buyer, causing irritation in Germany.

AFP/Expatica

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