Germany eyeing Opel decision 'midweek'
While the final say on who will buy a stake in GM's European operations lies in Washington, the German government can influence Washington’s decision with by guaranteeing loans to potential bidders.Berlin -- The German government said Monday it aimed to reach a decision by midweek on which bidder it prefers for General Motors' Opel unit, as the clock ticked down to bankruptcy at the once-mighty American giant.
"Our aim is to achieve clarity by midweek with regards to the potential investors and also with representatives from the US side -- from the US Treasury and with General Motors," government spokesman Ulrich Wilhelm said.
"This week will be a decisive week," Wilhelm told a regular briefing, with a range of "intense" discussions planned with all parties concerned including with GM, with Washington and with other European countries.
The final say on who will buy a stake in GM's European operations -- which include Opel, Vauxhall in Britain and Saab in Sweden -- lies in Washington and in GM headquarters in Detroit.
But three possible buyers -- Fiat, Magna International and RHJ -- last week filed formal expressions of interest in Berlin in order to secure billions of euros' (dollars) worth of loan guarantees from the German government.
GM is working against a June 1 deadline to either convince the US Treasury that it can achieve long-term viability or be forced to follow fellow US auto giant Chrysler into bankruptcy protection.
"We are making good progress," Wilhelm said, but clarification was needed on several issues including possible job cuts, plant closures, financing and the ownership of valuable product patents.
"There have been important clarifications in recent days and over the weekend. This must be continued under full steam in order to be in a position to be able to decide and make decisions well before a decision in the US on... the bankruptcy process for GM."
Fiat wants to combine GM's European and Latin American operations with Chrysler, in which it has secured a 20 percent stake, to create the world's second largest automaker.
Canadian auto parts giant Magna is bidding together with Russian tycoon Oleg Deripaska's truck company GAZ and Russia's biggest lender, the state-run Sberbank.
RHJ International is a Brussels-based company part-owned by US private equity group Ripplewood that owns stakes in several auto parts firms including Niles and Asehi in Japan, Belgium's Honsel -- and Columbia Music Entertainment.
German Chancellor Angela Merkel spoke by phone to Russian Prime Minister Vladimir Putin on Saturday about Magna's offer, and on Sunday spoke with the firm's owner Frank Stronach and chief executive Siegfried Wolf, Wilhelm said.
Merkel will also meet Fiat head Sergio Marchionne on Tuesday in Berlin.
Magna, which already assembles Saab, BMW and Mercedes vehicles under licence and which offered to buy Chrysler from Daimler in 2007, is seen as favourite in Berlin and Detroit.
German Economy Minister Karl-Theodor zu Guttenberg has said however that there was "significant risk" attached to its bid and that allowing Opel to go into insolvency remained an option.
Wilhelm said that talks were ongoing between the German government, GM and all three bidders, while economy ministry spokesman Steffen Moritz said that insolvency was a last resort.
"The first priority is to find an investor," Moritz told reporters.
"For the economy minister it is about whether the proposed concepts are currently sufficient to declare the search complete, and to be able to deploy taxpayers' money where the associated risks are acceptable."
Insolvency "is not an aim that he is pursuing but is the second best option," he said.
Juergen Pieper, analyst at Bank Metzler, said he believed that the government had raised the prospect of insolvency in order to put pressure on Fiat, Magna and RHJ.
"The actual chances of an insolvency are low," Pieper told AFP. "There is still room for negotiations."