Merkel urged to stand up to Obama on Opel jobs

3rd August 2009, Comments 0 comments

Germany is offering up to 4.5 billion euros in cheap loans and loan guarantees as part of a rescue deal for Opel, General Motors' European arm, and backs Magna's bid because it fears RHJ would slash jobs.

Berlin -- Amid transatlantic tensions over a state-backed takeover of stricken car company Opel, a German state leader Sunday urged Chancellor Angela Merkel to push Washington to support a plan that saves jobs.

Thuringia premier Dieter Althaus of Merkel's Christian Democrats called on the chancellor to lobby the White House to support Canadian group Magna's bid to buy Opel over that of Belgian investment group RHJ International.

"I am operating on the assumption that Chancellor Angela Merkel will use her influence with US President Barack Obama in the interest of Opel employees," Althaus, whose state hosts an Opel plant in the town of Eisenach, told the Bild am Sonntag newspaper.

Germany is offering up to 4.5 billion euros (6.4 billion dollars) in cheap loans and loan guarantees as part of a rescue deal for Opel, General Motors' European arm, and backs Magna's bid because it fears RHJ would slash jobs.

The debate comes in the heated atmosphere of the campaign for the September 27 general election in Germany as well as the country's worst postwar recession, with tens of thousands of jobs on the line.

The Social Democratic challenger to Merkel, Vice-Chancellor Frank-Walter Steinmeier, called GM chief executive Fritz Henderson Friday to underline Berlin's position, a spokeswoman confirmed Saturday.

Powerful Hesse state premier Roland Koch told the business weekly Wirtschaftswoche in its edition to be published Monday that US-German friction had heightened as Berlin made clear that Opel could only expect state aid if Magna won the bidding war.

"The tone of the talks with GM has gotten a bit more earthy," he said. "But now the German position has been understood."

Althaus said a plan in which the protection of German jobs was not taken into account was a non-starter.

"The loan guarantees from the (German) federal government and the states are available for the Magna scheme but not for that of a competitor which would put Opel's future at risk again," Althaus said.

"The only plan that foresees a future for Opel plants in Germany is Magna's."

Meanwhile Economy Minister Karl-Theodor zu Guttenberg urged both sides to pony up more of their own money to invest in Opel "in the interest of taxpayers," in an interview with Bild am Sonntag.

GM and Magna have signed a non-binding letter of intent on Opel's sale, but their talks have hit a snag and the RHJ offer has allowed GM to negotiate with Magna from a stronger position.

Magna's bid, which is backed by Kremlin-controlled Russian bank Sberbank, enjoys the support of Berlin, the four states where Opel has factories and the country's powerful trade unions but the final decision remains with GM.

General Motors, which is thought to favour RHJ, has exited bankruptcy protection under US government-backed initiatives and last month transferred its main assets to a new government-financed company.

AFP/Expatica

0 Comments To This Article