Opel Bidders Push To Win Labor Support As Decision Nears
25 Mai 2009 - 2:20PM
Dow Jones News
Bidders for General Motors Corp.'s (GM) German Adam Opel GmbH
unit are expected to discuss details of their offers with labor
representatives Tuesday in what appears to be one of the final
rounds of talks before a midweek decision on German government
support.
Officials of Austrian-Canadian auto supplier Magna International
Inc. (MGA) and Ripplewood Holdings LLC are expected for talks at
the unit's headquarters in Ruesselsheim, Opel labor representatives
said Monday.
A spokeswoman for Opel supervisory board member and labor
representative Armin Schild added that representatives of Italian
automaker Fiat SpA (F.MI) might attend as well.
Magna appears to be frontrunner for Opel. According to previous
statements, Magna has teamed-up with Russia's Sberbank (SBER.RS)
for a planned investment of around EUR700 million. Under the plan,
which is backed by Opel's labor representatives, Opel's troubled
parent would retain a 35% stake in the company. Sberbank would take
a 35% stake as well, with Magna holding 20% and Opel's employees
10%. Magna didn't return calls seeking comment. A spokesman for
Opel declined to comment on the bids.
The German government confirmed at a press briefing Monday that
it aims for a decision by the middle of the week. Government
spokesman Ulrich Wilhelm said Chancellor Angela Merkel had a
telephone conversation with Russian Prime Minister Vladimir Putin
Saturday, met with Magna's management on Sunday and aims to meet
Fiat Chief Executive Sergio Marchionne in the first half of this
week.
The government's task force has also talked with RHJ but the
firm's bid for Opel is less complex than those submitted by Magna
and Fiat, Wilhelm said.
Talks over the three bids appeared to have made some progress in
recent days. Several German politicians stated that Fiat and Magna
have sweetened their offers, but didn't provide details. However,
there are still a number of questions to be answered by GM as the
final decision on Opel's future is to be made in the U.S.
"We need considerable clarification from the American
government, such as on brand rights and intellectual property," the
governor of the German state of North Rhine Westphalia, Juergen
Ruettgers, told reporters.
Germany's federal government and the states of Hesse, North
Rhine-Westphalia, Thuringia and Rhineland Palatinate, which are
home to Opel plants, are considering bridge financing for Opel to
keep it operating if GM files for insolvency before Opel can be
sold.
The financing, which will be given only if the government and
the states regard at least one of the bid as sustainable, aims to
give Opel more time for negotiations with potential investors. The
interim financing of around EUR1.5 billion would be from
state-owned bank KfW and regional banks of the states with Opel
plants.
GM is "very likely" to file for bankruptcy, a Canadian union
chief said Friday, amid a flurry of activity ahead of a possible
prepackaged move into court. A so-called 363 filing splitting the
company into "good" and "bad" parts and controlled by the U.S.
government could come after a crucial U.S. union vote Thursday,
according to people close to the situation.
A GM bankruptcy is likely to be much more complex than that of
Chrysler LLC, which filed April 30, because of its sheer scale, the
size of its international operations and its impact on the supplier
industry.
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512; christoph.rauwald@dowjones.com
(Roman Kessler, Andrea Thomas, Doug Cameron, Nico Schmidt and Flemming Hansen contributed to this article.)