GM Fate Fuels Transatlantic Spat As Deadline Nears
28 Mai 2009 - 1:56PM
Dow Jones News
The political controversy over the fate of General Motors Corp.
(GM) intensified Thursday with a simmering transatlantic dispute
over the fate of its European operations.
The German government delayed a decision on supporting the
partial sale of GM's Opel/Vauxhall unit until Friday, calling for
more "seriousness" from the company and U.S. administration
officials involved in marathon talks.
GM needs to secure the fate of its domestic and overseas
operations ahead of a bankruptcy filing viewed as all but
inevitable, with an announcement expected as early as May 31.
Germany delayed a decision on providing state-backed bridge
financing to the Opel unit because its U.S. parent sought an extra
EUR300 million in bridge financing, on top of the EUR1.5 billion
already under discussion.
"What happened overnight in part borders on the absurd," German
Economics Minister Karl-Theodor zu Guttenberg said Thursday.
Austrian-Canadian Magna International Inc. (MGA) and Italian
auto maker Fiat SpA (F.MI) remain in the race for the
Opel/Vauxhall, while financial investor Ripplewood has dropped
out.
European Union industry ministers will hold a special meeting
Friday to discuss GM's fate amid concerns that efforts by
individual states to support GM - and preserve jobs - may challenge
EU state aid regulations. GM will not be present at the
meeting.
Some U.S. lawmakers are already challenging the proposed
Treasury bailout of GM. The pre-packaged bankruptcy plan would give
the U.S. government a stake of up to 70% in the company, in return
for fresh aid.
The political machinations on both sides of the Atlantic come as
GM's U.S. workers prepared to vote Thursday on a new pact that
would trim wages and benefits and provide a union-run health trust
with a stake in a reorganized company.
GM's bondholders have already rejected an offer to exchange
their $27 billion holding for a 10% stake in the company. The
company's board is due to meet before the end of the week, amid
speculation that the offer to secured creditors may be sweetened to
smooth its passage through bankruptcy court.
The company is widely expected to file in New York's southern
court, where a judge is presiding over the case of rival Chrysler
LLC.
A hearing on Chrysler's effort to exit bankruptcy with a U.S.
government-backed reorganization continues Thursday.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
(Beate Preuschoff, Nina Koeppen, Alessandro Torello and Peppi
Kiviniemi contributed to this article)