GM Europe Sale

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Chinese carmaker bids for GM's Opel

http://news.theage.com.au/breaking-n...0705-d91g.html

Chinese carmaker bids for GM's Opel: reports
July 5, 2009 - 4:49PM

Chinese carmaker Beijing Automotive Industry Corp. is in the running for General Motors' European unit with a bid worth 660 million euros (922 million US dollars), according to reports.

BAIC and GM China were both unavailable for comment when contacted by AFP Sunday.

BAIC submitted a non-binding offer for GM's German-based unit Opel late Thursday, just before a deadline for prospective buyers, according to China's Guangzhou Daily newspaper, the Financial Times and Dow Jones Newswires.

BAIC's offer was said to be worth 660 million euros.

Russian state lender Sberbank is also in the bidding for Opel in partnership with Canadian auto parts manufacturer Magna International.

The German government in May announced a rescue plan for Opel in which 35 percent of the firm would go to Sberbank and 20 percent to Magna, but talks have bogged down since.

According to the FT, RHJ International, a Brussels-based industrial holding linked to US buy-out group Ripplewood, has also made a non-binding offer.

Fiat is also interested in Opel, but has pledged no cash for the stake.

The head of GM Europe has said he hopes Opel will be bought by Magna by mid-July, and that the Canadian firm has a "considerable lead" on other possible buyers, a report said Saturday.

"The only thing remaining is for the details to be agreed" between the two businesses, Carl-Peter Forster told Sunday newspaper Frankfurter Allegemeine Zeitung.

© 2009 AFP

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More on the Chinese bid.

http://www.caradvice.com.au/34376/ch...uxhall-report/

China submits bid for Opel/Vauxhall – report

Despite already having a signed agreement with Magna International, a report from German newspaper Frankfurter Allegemeine Zeitung today says GM is considering a bid by China’s Beijing Automotive Industry Holding Corporation (BAIC) for a majority share of Opel.

The deal, worth a reported 660 million Euros, could be made binding as early as the end of the month and would see the Chinese company own a 51 per cent stake in Opel, but analysts say that GM will only consider the offer if the Magna deal falls through.

If the deal were to be completed, BAIC would be the main shareholder in both Opel and its British sister brand Vauxhall, leaving GM with 49 percent.

This remaining share would then be divided between Magna International, which would take a 20 per cent stake, and Russian partner Sberbank 35 per cent.

The remaining percentage would be owned by Opel dealers and employees.

Industry watchers still believe Magna’s consortium is the front-runner to buy Opel, but GM has said it is taking to other potential buyers for Opel including Belgium-based holding company RHJ International and BAIC, which builds Mercedes-Benz and Hyundai cars in China with analysts pointing out BAIC is keen to expand out of its domestic market.

One source close to BAIC said it entered the process comparatively late because GM was reluctant to involve it in the process at all, as the US carmaker does not want to create additional competition in China from Opel.

Analysts believe the only way Magna’s acquisition of Opel would collapse is if Magna withdrew its bid, forcing GM to then negotiate with another bidder like BAIC.

Fiat CEO Sergio Marchionne said on June 29 that his company is still interested in Opel despite Fiat withdrawing its bid in May.

GM can no longer afford to finance Opel and is selling majority control of the carmaker, which also includes plants in Britain, Spain, Belgium and Poland.

Germany, where most Opel plants are located, has provided 1.5 billion euros in finance to keep Opel alive until an outside investor is found.

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BAIC plans Opel plant in China: report

http://news.theage.com.au/breaking-n...0708-dbzt.html

BAIC plans Opel plant in China: report
July 8, 2009 - 1:14AM

Chinese auto maker BAIC, which is offering

$US922 million ($A1.16 billion) for a majority stake in Opel, plans to build a plant in

China and cut jobs in Europe if its bid succeeds, a report says.

In a non-binding offer submitted last week for the German-based unit of General Motors, BAIC proposed to spend $US2 billion on what would become Opel's first factory in China, according to the Financial Times.

The plant would come online in 2012 and make Opel models specifically geared towards the China market.

In addition, BAIC would use Opel's German

plants to export to China, the London-based newspaper said.

The Chinese auto maker also planned to shut down General Motors' Antwerp plant in Belgium and cut Opel's workforce across Europe, the report said, citing unnamed sources.

A German economic ministry spokesman said this week that BAIC had written to German officials regarding Opel, without elaborating.

But earlier German press reports said the Chinese firm had proposed to take a 51-per cent stake in Opel for 660 million euros ($A1.16 billion) with state guarantees of 2.64 billion euros.

BAIC's offer could put pressure on negotiations already underway for Opel.

Canadian auto parts manufacturer Magna International, backed by Russian state lender Sberbank, is in advanced talks with the US car giant to take a combined 55 per cent stake.

According to German reports Carl-Peter Forster, head of GM Europe, has said he hopes Opel will be bought by Magna by mid-July, adding that the Canadian firm had a "considerable lead" on other possible buyers.

An executive at BAIC's press office refused to comment when contacted by AFP on Tuesday.

© 2009 AFP

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Opel stirs renewed takeover speculation

http://news.theage.com.au/breaking-n...0714-dixs.html

Opel stirs renewed takeover speculation
July 14, 2009 - 12:09AM

Speculation swirled around the troubled German automaker Opel on Monday, with conflicting news about an offer by Beijing-based auto group BAIC and a new overture by Belgium-based investor RHJ International.

The German government denied a media report which said Berlin feared a "dangerous dependence" on China if BAIC were to take over Opel.

Mass circulation daily Bild earlier cited an expert government report as saying: "The Chinese government clearly wants to gain access to modern technology."

There is a danger that the German carmaker "could become dangerously dependent on the Chinese state," the report added, according to Bild.

But a spokeswoman for Economy Minister Karl-Theodor zu Guttenberg rebutted the report.

"I cannot confirm this. Such a report does not exist," she told a regular news briefing.

In Brussels, RHJI said it was in talks with Opel's parent company General Motors on buying a majority stake in the German auto-maker.

"These discussions have been taking place over a number of weeks and are at an advanced stage," the investment group said in a statement.

The Russian-backed Canadian autoparts maker Magna is still seen as best placed for an Opel takeover, though talks which followed the signing of a letter of intent have hit some snags.

Magna is the preferred investor of the German government and of GM, but the other two bidders have improved their offers in recent days, seemingly throwing the race wide open again.

Magna and GM signed a joint letter in late May concerning Opel under the aegis of the German government, which is to provide substantial financial support for a deal.

It was supposed to have been tied up by mid-July but this is now likely to be pushed back, economy ministry sources said.

Sources with knowledge of RHJI's discussions with Opel, cited by Belgium's Flemish-language De Standaard newspaper, said the investment group was working on an "improved offer" that would be submitted Monday or Tuesday.

RHJI describes itself as "a diversified holding company focused on creating long-term value for its shareholders by acquiring and operating businesses".

But Dow Jones Newswires quoted KBC Securities as saying there were questions about how RHJI would pay for Opel, because it had limited cash reserves and no financial backers had been identified.

KBC concluded that bid was unlikely to win out over either Magna or BAIC.

© 2009 AFP

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Opel talks with Belgium’s RHJ move froward

http://www.caradvice.com.au/34992/op...-move-froward/

Opel talks with Belgium’s RHJ move froward

Belgium’s RHJ International has emerged this week as a strong rival to Magna International in bidding for GMs’ German arm Opel.

The holding firm, which is linked to the US buyout company Ripplewood, said it is in advanced talks to buy a majority stake in Opel and wants to agree on a preliminary deal with GM this week.

“We felt we’ve reached advanced stages of negotiations, and we feel it is now appropriate to confirm these talks,” RHJ spokesman Arnaud Denis said.

RHJ also said it needs a smaller amount of German government guarantees to finance the deal than Magna (3.8 billion euros versus 4.5 billion euros respectively) and is seeking a stake between 51 per cent to 55 per cent of Opel.

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http://news.theage.com.au/breaking-n...0719-dp5h.html

German, Russia working together for Opel
July 19, 2009 - 6:34AM

Germany and Russia are "working together for the future of Opel" the carmaker, Chancellor Angela Merkel said late last week after she met with Russian President Dmitry Medvedev in Munich.

"Magna offers Opel a chance," Merkel added in reference to the Canadian parts maker that has offered to buy Opel with the help of the Russian bank Sberbank.

Magna and Opel's US parent company General Motors signed a non-binding letter of intention in May overseen by German officials who are to back the deal with large amounts of aid in a bid to save 25,000 German jobs.

Talks got bogged down however, and GM - which has just emerged from bankruptcy in the United States - is now also speaking with the Brussels-based investment group RHJ International.

Chinese automaker BAIC is also holding discussions with GM, but German officials have made it clear that if someone other than Magna gets Opel, Berlin might withdraw its offer of state aid.

© 2009 AFP

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No GM buy back of Opel; German minister

http://www.caradvice.com.au/35434/no...rman-minister/

No GM buy back of Opel; German minister

Germany’s economics minister has ruled out any attempt by General Motors to include an option to buy back majority control of GM Europe, which produces Opel and Vauxhall vehicles, as part of a deal to give up more than 50 per cent of its German subsidiary in exchange for state aid.

“This is incompatible with our views and cannot happen,” Karl-Theodor zu Guttenberg told German Sunday newspaper Frankfurter Allgemeine Sonntagszeitung in an interview.

Reuters Newsagency says the comments could suggest that Belgian financial investor RHJ International may have problems with its bid if the company is viewed as only a short-term player.

Germany is expected to shoulder the bulk of the billions in loan guarantees as part of a deal, and state and federal governments are represented on the board of a trust that has to approve a sale of Opel.

The minister also warned bidders for Opel will have to invest more of their own capital for the package of state aid to obtain EU clearance, since otherwise the only ones risking anything are taxpayers.

Mr Guttenberg explained that the size of the state aid requested would not be the deciding factor alone for Berlin.

“That’s too simple. What good is an offer that is cheap (to the taxpayers) if the return of the money is in question?

“The key will be if a concept is so sustainable that there is a high probability that the interest, fees and the money can be paid back,” he said.

When asked what was sustainable he responded: “A competitive company that urgently addresses the need to consolidate (capacity and staff).”

Magna International, RHJ and Beijing Automotive (BAIC) have been in a race to acquire Opel, with final binding offers due at the close of business in Europe today.

BAIC has requested only 2.64 billion euros in state aid, while RHJ wants 3.8 billion and Magna 4.5 billion, but the Canadian supplier is seen as heavily favoured within Germany, a country where the short-term horizon associated with financial investors is viewed with suspicion.

Magna’s board of directors was expected to approve its takeover plan for Opel at a meeting yesterday evening.

Some executives at GM, unhappy about losing control over Opel, are pushing for a deal with RHJ in part because of the higher likelihood that the US company could reacquire control over its former German subsidiary, sources familiar with the talks told Reuters.

Magna’s co-CEO, Siegfried Wolf, has unwavering support from Opel’s labour leaders, regional governments that are home to the carmaker’s plants and Germany’s junior coalition partners, the left-leaning Social Democrats.

German Chancellor Angela Merkel said last week that the bid from Magna’s Russian-backed consortium offered “excellent starting points,” and a day later her spokesman said Berlin had a “certain preference” for the concept.

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GM gets three final bids for Opel

http://www.caradvice.com.au/35597/gm...bids-for-opel/

GM gets three final bids for Opel

General Motors said Monday that it had received three binding takeover offers for Opel that it would consider together with the European countries that would be affected by the deal.

In a surprise move, the once heavily favoured consortium of Magna International Inc. and Sberbank changed its plans at the last minute and agreed that they would evenly split a stake in Opel, in a concession to critics, a source with knowledge of the matter told Reuters Newsagency.

“The final bids as well as GM’s preliminary findings will then be reviewed with the German and other impacted governments, the EU Commission and the Opel/Vauxhall Trust Board,” GM Europe said in a statement released after the deadline for submissions, without naming the bidders.

Berlin is expected to have a large say in the decision, since it would provide the bulk of up to 4.5 billion euros (US$6.4 billion) in expected loan guarantees for Opel.

Earlier, Magna and Brussels-based private equity firm RHJ International said they would submit final bids.

A source familiar with the matter told Reuters that China’s Beijing Automotive also delivered a binding offer for Opel and its UK sister brand Vauxhall.

Magna and Russian partner Sberbank now aim to each take a 27.5 percent stake in Opel. Magna, a Canadian auto parts maker, originally planned to take just 20 per cent, with the Kremlin-backed lender holding the remaining 35 per cent.

The change could help soothe concerns in Germany over the potential influence of the Russian bank, which weeks ago began to talk about selling the possible stake holding in Opel to a domestic carmaker.

A stalemate between GM and Germany could be emerging over their differing preferences for the two competing bids, in which RHJ foresees shrinking Opel’s production footprint to a more manageable level while Magna targets growth in the dynamic, but volatile, Russian market.

“Then (if there is disagreement between GM and Germany) we naturally have a problem and it becomes really complicated,” said a source familiar with the thinking of Opel’s trustees.

The trustees must formally approve any sale, and Germany and GM are evenly represented in the group.

Magna wants to convince the German federal and state governments that its plan best guarantees Opel its long-term independence from GM and ensures the European carmaker can decide for itself on issues including where it would develop new vehicle architectures or key modules and components.

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No decision soon on GM Europe

http://www.caradvice.com.au/35671/no...-on-gm-europe/

No decision soon on GM Europe

Newsagency reports indicate that a meeting in Berlin later today will not resolve the future of the loss-making GM Europe subsidiary of General motors

The meeting between US carmaker General Motors and German government officials will not yield a decision on which bidder will succeed in taking a stake in the company that produces Opel and Vauxhall vehicles, a German government source said.

Reuters Newsagency quotes the source as saying it is also unlikely that a preliminary decision will be made on GM Europe’s future this week.

GM said on Monday it had received three binding takeover offers for the Opel/Vauxhall business.

The company will now consider them together with European countries affected by the deal, including Germany.

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Germany, GM disagree on Opel future

http://www.caradvice.com.au/35721/ge...n-opel-future/

Germany, GM disagree on Opel future

Canadian car parts maker Magna is still Germany’s preferred partner to take a majority stake in GM Europe, Chancellor Angela Merkel has said, setting the stage for a showdown with General Motors over the takeover bids.

Officials from the German government and GM discussed the three offers for the loss-making European subsidiary that builds Opel and Vauxhall vehicles.

The three offers were submitted on Monday, and German and GM failed to agree on which they liked best.

GM has received offers from a consortium of Canadian supplier Magna and Russia’s Sberbank, from private equity company RHJ International, and a third from China’s Beijing Automotive (BAIC).

GM has to agree a choice with Germany, which is providing loan guarantees to the buyer and the subject is likely to be an issue in the campaign for Germany’s election on September 27.

“We have made clear that we view the Magna plan as sustainable in all respects,” Ms Merkel said at a company visit in northern Germany, adding the talks between GM and German officials would need longer.

German officials informed GM representatives of their preference for Magna, said Jochen Homann, head of the German government’s Opel Taskforce after the four-hour Berlin meeting.

“GM was very guarded about this,” he said, adding all the bids had several questions to be cleared up. Sources close to the talks said the officials had had a frank exchange of views.

GM likes the offer from RHJ, a Belgium-based financial investor that aims to shrink production to return Opel to profit and may be open to selling it back to GM at a later date.

Mr Homann said further talks would take place once issues had been cleared up. He said all potential investors were offering a modest sum in terms of their own capital and that GM had to give way on some issues, such as on licence fees.

Eventually, the two sides, along with other European governments with Opel/Vauxhall plants, must agree on a partner. Both are represented on the Opel Trust, which has been responsible for Opel since GM entered bankruptcy in June.

The trust holds 65 per cent of Opel shares and must approve the investor. GM holds 35 per cent of Opel shares, while the German government is being asked to provide loan guarantees worth up to 4.5 billion euros (US$6.4 billion).

Magna wants to expand Opel’s full-scale car assembly business and forecasts high growth rates, particularly in Russia, home of its consortium partner Sberbank.

Several people familiar with the matter told Reuters Newsagency that the German states that are home to Opel factories also still prefer Magna’s offer.

The state premiers, like Ms Merkel are fearful of the prospect of mass layoffs among Opel’s roughly 25,000 workers in Germany before September’s election.

Mr Homann said the Chinese carmaker was still in the race for Opel but lagging behind.

In Britain, Business Secretary Peter Mandelson met Vauxhall management and unions. British authorities want to protect UK production and the company’s its 5500 strong workforce.

GM Europe is to hold talks with the UK government later this week

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Stalemate as Opel sale stalls

http://www.goauto.com.au/mellor/mell...2575FC00153B60

Stalemate as Opel sale stalls

GM, Germany agree to disagree on preferred bidders for European operations

By RON HAMMERTON 23 July 2009

A SHOWDOWN is looming between General Motors and the German government over the sale of GM Europe after high-level talks in Berlin broke up today without a resolution.

The parties reportedly prefer different bidders for the European operations of Opel and Vauxhall, with the German government pushing for Canadian-based parts-maker Magna International, which is backed by Russia’s Sberbank, and GM preferring Belgian private equity firm RHJ International.

A third bidder, Chinese car-maker Beijing Automotive Industry Corp (BAIC), is said to be lagging behind the others, according to Automotive News.

The problem for GM is that the German government and several German states that host Opel manufacturing plants have indicated they will only provide crucial billions of euros in state loan guarantees if Magna gets the nod.

The issue was discussed at a four-hour meeting in the German Chancellery in Berlin but, despite what sources called a “frank exchange of views”, several sticking points remain unresolved, including GM’s hold over licence fees.

There was no word on when the parties would return to the negotiating table, but GM has said it needs to close the deal by the end of the third quarter.

The British government, which is concerned with the interests of Vauxhall’s manufacturing operations at Ellesmere Port and Luton, has also become involved, but has not yet shown a bidder preference.

The UK has been meeting separately with the bidders to seek assurances that Vauxhall’s 5500-person workforce would be considered in any re-shaping of the GM Europe operation. Like Germany, it has promised to partly underwrite the takeover of GM Europe, as long as the new owner meets government conditions.

Ellesmere Port has been nominated as one of the production sites for the new Astra from September.

UK business secretary Lord Mandelson won the support of UK car-manufacturing unions for the British stand after talks with Vauxhall on Wednesday.

Lord Mandelson said he had been in constant contact with the German and US governments over the issue.

Since GM filed for Chapter 11 bankruptcy last month, Opel has been run by the Opel Trust – a five-person board consisting of two GM representatives, two German government representatives and a fifth, non-voting “neutral” chairman, Fred Irwin – the president of the American Chamber of Commerce in Germany.

Any sale must be approved by the trust.

Under the latest offer from the Magna consortium, Magna and OAO Sberbank would both buy 27.5 per cent, with 35 per cent remaining with GM and the final 10 per cent going to Opel workers.

The proposal calls for €4.5 billion ($A7.8b) in government loan guarantees.

In a preliminary offer from last week, RHJ offered to invest €275 million ($A478m) for a 50.1 per cent stake in Opel, requesting €3.8 billion ($A6.6b) in government funding.

The RHJ plans for Opel reportedly include a scaling down of manufacturing operations to make it more profitable – a proposal that GM likes but the German government is wary of, fearing major plant closures and job losses.

BAIC's preliminary offer was valued at €660 million ($A1.14b) for a 51 per cent stake in Opel and it asked for €2.64 billion ($A4.6b) in German government guarantees.

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Magna offers more for Opel/Vauxhall

http://www.caradvice.com.au/36349/ma...more-for-opel/

Magna offers more for Opel/Vauxhall

Canadian car parts maker Magna International offered to increase the amount of upfront capital it would invest in Opel/Vauxhall as part of a bid for the General Motors’ European unit, several sources have said according to Reuters Newsagency.

The revised bid leaves the total proposed amount at some 500 million euros (US$714 million), but tilts the financing mix towards an immediate equity injection instead of using convertible debt for the bulk of the funding, Reuters said.

In a blog entry posted on the company’s website on Tuesday, GM’s chief negotiator said he still expected the deal to close by the end of September, although no preference as yet has been made for a specific bidder and key points had yet to be resolved.

“The bid from RHJ International is completed, and would represent a much simpler structure and would be easier to implement…This represents a reasonable and viable option to be considered as the very difficult issues around the Magna negotiations continue to be worked (on),” GM’s John Smith wrote.

GM has previously indicated a preference for the RHJ offer as there is the possibility that the Belgium-based company would eventually sell its interest back to GM, something the German government strongly opposes.

Magna’s new offer is expected to silence some of the critics in the German government that have admonished it for effectively shifting all of the risk onto German taxpayers, who will largely finance the deal through billions in loan guarantees.

Germany’s economics minister, Karl-Theodor zu Guttenberg, has said that European cartel authorities would look at Opel’s ratio of equity to debt as a key criteria for whether a new owner just served as a fig leaf for a state-sponsored bailout.

“Magna is now offering 350 million euros of its own capital immediately,” said the government source, who is familiar with talks to find an investor for GM Europe, which builds Opel and Vauxhall vehicles.

“Furthermore, there should be a 150 million euro convertible bond.”

The Canadian company and its consortium partner, the Russian Sberbank, are competing with RHJ International for GM Europe.

GM can no longer afford to finance its European carmaker and is being forced to give up majority control in exchange for substantial government aid for Opel/Vauxhall.

“The world is a different place with 350 million. This proves it was a correct decision to negotiate with two parties — otherwise Magna never would have improved its offer,” one source close to the talks said, adding that the only remaining hurdle for Magna now was reaching an agreement with GM.

Magna’s founder and chairman, Frank Stronach, met with GM Chief Executive Fritz Henderson on Monday in Detroit to discuss some of the last issues of contention between the two.

Magna wants to expand Opel’s full-scale car assembly business and forecasts high growth rates, particularly in Russia.

RHJ aims to shrink production to return Opel to profit and may be open to selling it back to GM at a later date.

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GM pushing to conclude Opel sale

http://www.caradvice.com.au/38157/gm...ude-opel-sale/

GM pushing to conclude Opel sale

General Motors Company has no intention of reopening the sale process for its European operations, which build Opel and Vauxhall vehicles, and remains intent on reaching a deal with one of the two remaining bidders as quickly as possible.

GM Chief Financial Officer Ray Young said the company was looking to wrap up the Opel/Vauxhall sale as quickly as possible even after improvements in its own financial position removed the immediate threat of bankruptcy for Opel, reports Reuters Newsagency.

“I think everyone is anxious to get this thing done,” Mr Young said on the sidelines of a GM event at its vehicle testing facility outside Detroit.

Canadian auto parts group Magna International is locked in a battle with Belgium-based investor RHJ International to buy GM Europe in negotiations that also involve the German government.

Berlin has thrown its support behind Magna’s offer, which is backed by Russia’s Sberbank, on the grounds that it offers better protection for the 25,000 jobs on Opel’s payroll in Germany.

GM has expressed reservations about the Magna deal, saying it wants to make sure that its proprietary technology in Opel/Vauxhall is protected in any partnership. Talks between GM and Magna last week failed to produce a deal for Opel.

GM Chief Executive Fritz Henderson told Reuters in an interview at the same event that he did not expect to reopen the Opel sale to any party beyond Magna and RHJ.

“I don’t think so,” Mr Henderson said when asked if a dark horse bidder could emerge for Opel.

Although GM is leading the talks on the Opel sale, the German government is being asked to provide billions of euros in aid to finance the deal.

The German Chancellor, Angela Merkel, has openly supported the Magna bid for GM Europe, and has indicated she would intervene personally to support Magna if needed.

With a federal election looming next month, the German government is keen to avoid an unpopular takeover and mass layoffs.

GM emerged from bankruptcy in the United States in July under the majority ownership of the US Treasury, which invested US$50 billion in the troubled carmaker.

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Germany turns up pressure on GM over Opel

http://news.theage.com.au/breaking-n...0820-es69.html

Germany turns up pressure on GM over Opel
Simon Sturdee
August 20, 2009 - 10:44PM

Germany upped the pressure on US auto giant General Motors on Thursday to sell its European unit Opel to Berlin's preferred bidder, setting the stage for a potential transatlantic showdown.

German Chancellor Angela Merkel's government wants GM, which emerged from bankruptcy last month and is now majority owned by the US government, to choose an offer from Canadian parts maker Magna backed by a state-owned Russian bank.

But GM's board is widely believed to prefer an offer from Brussels-based investment group RHJ International as the Detroit behemoth believes it might be able to buy it back from RHJ in better times.

And the clock is ticking: German Economy Minister Karl-Theodor zu Guttenberg said on Wednesday that he expected GM's board to make a "decision in principle" on Opel late on Thursday or Friday.

The Frankfurter Allgemeine (FAZ) German daily reported on Thursday that this would come on Friday morning US time -- afternoon time in Berlin -- and that this decision would go under the spotlight in Germany next week.

In order to speed the process up, the head of the German government's "Opel Task Force" has written to GM negotiator John Smith offering a 4.5-billion-euro (6.4-billion-dollar) loan, he told the FAZ.

Previously, the plan was for Germany to stump up the loan together with other European countries where Opel has factories, but the Task Force's Jochen Homann said that Berlin has decided to go it alone for now.

"We have offered GM for us to cover the whole sum," Homann, who is also a state secretary in the economy ministry, told the FAZ.

Germany is willing to go it alone because around half of GM's 50,000 workers in Europe are employed in the country, but Britain, Spain, Poland and Belgium will still be expected to stump up cash at a later stage, the FAZ said.

The loan is not cheap, however -- it carries a 10.5-percent interest rate, the paper noted. Germany has already provided 1.5 billion euros in short-term loans to enable Opel to cover its day-to-day operating costs.

The FAZ also reported that Homann has written to Magna boss Siegfried Wolf, calling on him to secure loan guarantees from the Russian government of Prime Minister Vladimir Putin.

Both Magna and RHJ want to cut 10,000 jobs at Opel, but Merkel and the state governments where Opel has factories prefer Magna because fewer of the cuts would fall in Germany than under RHJ's proposals, the FAZ said.

The Bild daily reported meanwhile that top GM executives including CEO Fritz Henderson would meet on Thursday in Detroit with Wolf, as well as with Sberbank chief German Gref.

© 2009 AFP

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GM board to weigh Opel sale Friday

http://news.theage.com.au/breaking-n...0821-et6k.html

GM board to weigh Opel sale Friday
Joe Szczesny
August 21, 2009 - 1:44PM

General Motors assembles its board of directors Friday to discuss the sale of its ailing Opel unit amid pressure from Germany and fears of job losses.

GM emerged from bankrutpcy in July after wiping out 47 billion US dollars in debt and is now majority-owned by the US government.

The 100-year-old company, once the world's largest automaker, has felt heat from Germany to choose a takeover bid from Magna International, a Canadian auto parts manufacturer, backed by state-owned Russian bank Sberbank.

But GM prefers a rival bid from Brussels-based investment group RHJ International.

GM officials told AFP the board would hold a conference call to discuss the company's European operations.

"They're going to meet by phone to go over the status of the bids," said a GM official, who requested anonymity.

"However, there are still some open issues. Unfortunately, we don't have anything else to say at this point," the official said.

German Chancellor Angela Merkel's government is seeking to snare the jobs-saving deal before the September 27 general elections.

A final decision might not come until next week, GM officials indicated.

The high-stakes maneuvering continued Thursday in Detroit, Michigan, the capital of the US auto industry.

Magna officials confirmed privately that representatives of the Canadian auto parts maker and Russia's Sberbank had met with GM officials in "Motor City."

"It was a relationship-building exercise," said one Magna official, who requested anonymity and added: "There were not any negotiations."

Opel, which has 25,000 employees in Germany, is considered too weak to survive without a partner.

Magna is offering 350 million euros (498.8 million US dollars) of its own capital and 150 million (213.8 million) in credit to Opel; RHJ has pledged 275 million euros (391.9 million US dollars) of its own money.

While Germany has made clear its preference for Magna, GM has indicated that RHJ's plan would be easier to put in place.

On Thursday, the Frankfurter Allgemeine (FAZ) German daily reported that Jochen Homann, the head of the German government's "Opel Task Force," said he had offered GM a 4.5-billion-euro (6.4-billion-dollar) loan.

Previously, the plan was for Germany to participate in the loan with other European countries where Opel has factories, but the Task Force chief said that Berlin decided to go it alone, at least for now.

Germany is willing to shoulder the loan because around half of GM's 50,000 workers in Europe are employed in the country, but Britain, Spain, Poland and Belgium would still be expected to contribute cash at a later stage, the FAZ said.

Both Magna and RHJ want to cut 10,000 jobs at Opel but Merkel and the state governments where Opel has factories prefer Magna because fewer of the cuts would fall in Germany than under RHJ's proposals, the FAZ said.

Britain's business minister, Peter Mandelson, urged the GM board Thursday to make an objective decision which will secure the long-term viability of both Opel and Vauxhall.

Vauxhall, the British arm of the business which also includes Opel in Germany, employs around 5,000 workers at two sites in Britain.

"The UK government expects the GM Board to take an objective, commercial decision about the future of its European operating divisions," Mandelson said in a written statement to AFP.

"This decision, above all, needs to secure the long-term viability of both Opel and Vauxhall in the UK and should be not be distorted by political considerations in any one country."

© 2009 AFP

[vztrt]

GM to discuss Opel sale, Merkel presses Magna case

http://news.theage.com.au/breaking-n...0821-ettp.html

GM to discuss Opel sale, Merkel presses Magna case
Joe Szczesny
August 21, 2009 - 9:09PM

The General Motors board will on Friday discuss the sale of its ailing European unit Opel as German Chancellor Angela Merkel pressed her favored option amid fears of major job losses.

GM emerged from bankruptcy in July after wiping out 47 billion US dollars in debt in a restructuring that left it majority-owned by the US government.

Now the 100-year-old company, once the world's largest automaker, is feeling the heat from Germany which wants it to sell Opel to Magna International, a Canadian auto parts manufacturer backed by state-owned Russian bank Sberbank.

GM, however, prefers a rival bid from Brussels-based investment group RHJ International.

"Right now I am very skeptical about the chances of RHJ. We have to find a solution together with General Motors. Our preference is clearly with Magna," Chancellor Merkel told the Frankfurter Allgemeine (FAZ) daily on Friday.

"Magna has experience making cars and has the better plan," Merkel added.

GM officials told AFP the board would hold a conference call to discuss the company's European operations.

"They're going to meet by phone to go over the status of the bids," said a GM official, who requested anonymity.

"However, there are still some open issues. Unfortunately, we don't have anything else to say at this point," the official said.

Merkel's government is seeking to snare the jobs-saving deal before facing September 27 general elections but a final decision might not come until next week, GM officials indicated.

Opel, which has 25,000 employees in Germany and another 25,000 elsewhere in Europe, is considered too weak to survive without a partner.

Magna is offering 350 million euros (499 million US dollars) plus 150 million euros in a credit line for Opel while RHJ has pledged 275 million euros but is seeking less state aid.

While Germany has made clear its preference for Magna, GM has indicated that RHJ's plan would be easier to put in place.

On Thursday, the Frankfurter Allgemeine (FAZ) German daily reported that Jochen Homann, the head of the German government's "Opel Task Force," had put up a 4.5-billion-euro (6.4-billion-dollar) loan to help smooth the Opel sale.

Previously, the plan was for Germany to participate in the loan with other European countries where Opel has factories but the Task Force chief said that Berlin had decided to go it alone, at least for now.

"We have offered GM for us to cover the whole sum," said Homann, who is also a state secretary in the economy ministry.

Germany has already provided 1.5 billion euros in short-term loans to enable Opel to cover its day-to-day operating costs while a final solution is worked out.

Britain, Spain, Poland and Belgium, where GM has other sites, would still be expected to contribute cash at a later stage, the FAZ said.

Both Magna and RHJ want to cut 10,000 jobs at Opel but Merkel and the state governments where Opel has factories prefer Magna because fewer of the cuts would fall in Germany than under RHJ's proposals, the FAZ said.

Britain's business minister, Peter Mandelson, urged the GM board Thursday to make an objective decision which will secure the long-term viability of both Opel and Vauxhall, the British GM brand.

Vauxhall employs around 5,000 workers at two sites in Britain.

"The UK government expects the GM Board to take an objective, commercial decision about the future of its European operating divisions," Mandelson said in a written statement to AFP.

"This decision, above all, needs to secure the long-term viability of both Opel and Vauxhall in the UK and should be not be distorted by political considerations in any one country."

© 2009 AFP

[vztrt]

Germany presses for news this week on Opel's fate

http://news.theage.com.au/breaking-n...0824-evyx.html

Germany presses for news this week on Opel's fate
Amandine Ambregni
August 24, 2009 - 12:39PM

General Motors kept Germans guessing over the weekend over the fate of its troubled Opel unit even as pressure mounted for a decision on a proposed takeover by Canada's Magna International.

With just five weeks until German elections, leading politicians on Sunday ratcheted up calls for General Motors and the US authorities to make a decision as early as next week.

"The sooner the better," German Chancellor Angela Merkel told ZDF television in an interview for broadcast late Sunday. "I wanted it to come on Friday evening. Now, I hope it will be next week."

The board of General Motors -- which emerged from bankruptcy protection in July -- met on Friday in Detroit to mull the future of Opel, but said in a statement that the meeting ended with no decision made.

The board discussed two takeover offers on the table -- one from Canadian autoparts maker Magna International and state Russian lender Sberbank, and another from Brussels-based investment group RHJ International.

A German Economy Ministry spokesman told AFP he could not say precisely when negotiations might resume.

GM, which is now more than 60-percent held by the US government on the heels of its bankruptcy, did not comment at the weekend on what the next steps would be.

GM is believed to favor RHJ as more attractive and easier to implement. But Germany has an interest in Magna's bid because it appears to contain greater protections against job losses in Germany.

Both bidders want to cut around 10,000 jobs at Opel. In all 25,000 jobs would be at stake in Germany if Opel were to fold altogether.

Bringing its weight to bear, the German government is stumping up several billion euros in loans to sweeten the deal. In addition, around half of General Motors European employees work in Germany.

German Foreign Minister Frank-Walter Steinmeier, who hopes to unseat Merkel in September 27 elections, said in a statement he had telephoned his US counterpart Hillary Clinton to press Berlin's case.

Steinmeier "emphasised that after several months of intensive negotiations, the time had now come for a decision," according to a statement issued by the foreign ministry.

"The workers at Opel deserve clarity and a credible prospect for the future," the statement added. He called for a decision "as quickly as possible that safeguards the future of all Opel factories and as many jobs in Germany as possible."

According to press reports, Germany is prepared to offer a 4.5-billion-euro (6.4-billion-dollar) loan to Magna in an attempt to persuade GM to choose the Canadian-led offer.

© 2009 AFP

[vztrt]

GM angers Germany over Opel decision

http://www.caradvice.com.au/38910/gm...opel-decision/

GM angers Germany over Opel decision

The game of brinkmanship that General Motors has been playing over the future of its loss-making European subsidiary, GM Europe, which makes Opel and Vauxhall vehicles, has started to unravel it would seem.

GM has been suggesting for more than a week that it was about to decide between two suitors for Opel/Vauxhall and would announce the fate of the European company immediately.

However, no decision has yet been announced and the German Chancellor, Angela Merkel, whose government ultimately controls the purse strings that will finance a rescue, has now expressed her frustration with GM’s lack of a decision.

Chancellor Merkel expressed her regret at GMs’ failure to choose a buyer for Opel/Vauxhall, and said that a decision was “urgently” needed for the carmaker’s future.

In an interview with German ZDF television, Ms Merkel said she felt there might be a conflict of interest between GM and countries with a stake in its European operations, but that progress was being made.

“I regret that a final decision wasn’t made, but I hope it will happen soon, because both for the workers and the economic situation at Opel, we urgently need a decision,” she said.

“The conflict of interest could be that we think Magna has made a very good offer … which makes GM a minority shareholder in the whole set-up, and there may be voices at GM … who’d prefer that this minority shareholding wasn’t so marked,” she said.

Despite German pressure to back a bid by Magna International, General Motors Company on Friday declined to name the Canadian automotive firm as the winning bidder for Opel/Vauxhall, leaving the fate of the carmaker up in the air.

Mindful of a federal election due on September 27, the German government has offered financial backing for Magna’s bid because it believes it would be the best option to save jobs at Opel, which employs around 25,000 workers in Germany.

German politicians have urged the United States government to help broker a deal, and the Foreign Ministry said it had contacted the US administration at the weekend with this in mind.

Extending the wait on the firm’s future sparked a round of angry reactions from German politicians at the weekend, who reaffirmed their support for Magna’s bid.

“Now I hope we’ll make progress this week,” Ms Merkel said.

“I think we’ve moved things along well … and that we’re not far from the end, and hopefully we’ll be at the end soon.”

Sources familiar with the talks said GM directors wanted Berlin to say what financing would be available to back a rival Opel bid by Brussels-based financial investor RHJ International, which is said to be disposed to selling Opel back to GM at a later date.

Berlin and the German states that host Opel plants have made clear they want Magna to get the carmaker and are set to provide €4.5 billion (US$6.4 billion) in state aid to make it happen.

[vztrt]

GM may try to keep Opel

http://news.theage.com.au/breaking-n...0825-exdc.html

GM may try to keep Opel
Amandine Ambregni
August 25, 2009 - 12:19PM

General Motors, which for months has been trying to sell Opel, reportedly is now trying to keep the ailing German brand, a move that would drive a stake in Berlin's favored option: a takeover by Magna.

GM, which emerged from bankruptcy protection last month with the US government owning a majority stake, is trying to develop a 4.3 billion dollar financing plan that would allow it to keep control of Opel, The Wall Street Journal reported late Monday.

That amount would compete with the 4.5 billion euros (6.4 billion US dollars) the German government is offering in public financing to support a takeover by Canadian auto parts maker Magna and its bid partner, Russian state-owned bank Sberbank.

It also is roughly in line with the 3.8 billion euros (5.4 billion US dollars) in public financing offered by rival bidder, Brussels-based investment group RHJ International.

Contacted by AFP, GM declined to comment on The Wall Street Journal report.

If the US automaker changes strategic tack, it would short-circuit the massive rescue effort of Opel undertaken by the German government in the face of potential big job losses -- about half of GM's 50,000 European employees work in Germany -- ahead of September 27 elections in which Chancellor Angela Merkel is seeking a second term.

After having clearly expressed for months its desire to get rid of Opel and its British affiliate, Vauxhall, which form the core of the company's European operations, GM, once the world's largest automaker, struck a tentative agreement with Magna in May, days ahead of seeking bankruptcy protection.

But the potential deal has suffered tortuous setbacks, with GM and Berlin wanting to raise the bids, and a smaller GM emerging from bankruptcy-court reorganisation in July under new leadership and stripped of assets.

The parties reached an impasse last weekend, after the GM board of directors discussed the options for Opel but did not proceed with the Magna offer, backed by Berlin, or that of RHJ.

While GM remained tight-lipped over the fate of Opel, German Chancellor Angela Merkel's government stepped up the pressure, calling on the US government, which owns more than 60 percent of GM, to push a resumption of negotiations with the automaker.

On Monday, the White House rebuffed German government pressure, saying President Barack Obama's "view is that decisions made about the day-to-day operations at General Motors should be made by the folks at General Motors."

"He never wanted to get into the auto business, and he's happy for them to make their decisions and get back on their feet," said White House deputy spokesman Bill Burton.

According to The Wall Street Journal, citing three sources involved in the matter, GM chief executive Fritz Henderson presented the options Friday to the company's newly formed board of directors in hopes of winning support for the Magna offer.

"The board turned down the Magna deal, these people said, raising questions about how such a sale would affect GM's strategy in Europe, and also voicing concern about specific details related to the German government's financing commitment," the newspaper said.

According to the sources, the management team was asked to rethink its options, and also to prepare more scenarios for consideration, including a plan to raise billions in new financing that would allow GM to keep Opel for itself.

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

Henderson "is supposed to have the plan done by the board's next regularly scheduled board meeting in early September," the newspaper said on its website.

German government spokesman Ulrich Wilhelm said Monday that Germany had received "no indications" to support media reports that GM was considering holding on to Opel.

Keeping Opel "would be in GM's long-term stratetic interests," said Terrence Guay, a professor of international business at Pennsylvania State University.

"Giving up on the European market may, in 10 to 20 years, be viewed as a serious mistake" if GM intends to remain a global company, he said.

© 2009 AFP

[vztrt]

GM still wants to sell Opel; Germany

http://www.caradvice.com.au/39071/gm...-opel-germany/

GM still wants to sell Opel; Germany

Germany believes the management of General Motors Company is still committed to finding a buyer for its European unit Opel/Vauxhall, government officials said after talks with the US carmaker in Berlin.

At a meeting last Friday, GM’s board of directors postponed a decision on management’s proposals to relinquish a controlling stake in Opel either to Canadian automotive group Magna International or Belgium-based finance investor RHJ.

A GM source told Reuters Newsagency after the latest talks that the company was considering a third alternative that would see it inject billions of dollars into Opel to hold onto the company, although people close to the talks believe this is a bargaining tactic.

The formerly bankrupt US carmaker, which is a ward of the state, would need to raise €1.5 billion (US$2.15 billion) just to pay back the German government’s bridge loan before it then could raise enough money to fund Opel’s operations until it generates cash itself.

“By not selling Opel/Vauxhall, GM has essentially two options — providing €3 billion (US$4.3 billion) to continue operations (less than the 4.5 billion promised by the German government) or liquidation,” credit analysts at UniCredit said.

After Tuesday’s meeting with Germany’s Opel taskforce in Berlin, however, GM’s management board “had made it clear” it was still interested in a buyer, a German official told Reuters on condition of anonymity.

Economy Minister Karl-Theodor zu Guttenberg later said that GM management was still telling Germany it is “interested in an investor solution,” but that the GM board may have baulked at making a decision because its new members are not up to speed with negotiations.

“It seems they don’t really have a good idea of the state of negotiations…. I must say this lies in a knowledge deficit,” he said in an interview with ZDF television.

One major sticking point preventing GM from picking Germany’s preferred candidate, Magna, was Berlin’s insistence that Opel still has access to GM’s centralised patent unit GTO, a company source close to the talks told Reuters.

Last week’s failure to choose a buyer disappointed both politicians and labour unions in Germany, with unions threatening “spectacular measures” to force a decision.

Opel’s senior labour leader, Klaus Franz, told Reuters on Tuesday that the 25,000 German workers would not contribute the US$1.2 billion in structural costs requested by management if GM refused to sell to Magna.

Talks to sell Opel have dragged on for months and are a political hot potato ahead of German elections in September, because of the state support required for the eventual buyer.

Despite prodding from GM’s top negotiator on the deal, John Smith, Chancellor Angela Merkel and the German states refused to back RHJ, the rival bidder that is believed to be disposed to selling Opel back to GM at a later date, over their preference of Magna.

[vztrt]

Germany drops opposition to RHJ's Opel bid: report

http://news.theage.com.au/breaking-n...0826-ezmj.html

Germany drops opposition to RHJ's Opel bid: report
August 26, 2009 - 6:14PM

The German government has dropped its opposition to General Motors selling its Opel unit to investment group RHJ following pressure from the US auto giant, a newspaper report said Wednesday.

Until now, Chancellor Angela Merkel's government has offered state aid only to support a bid from Canadian auto parts maker Magna and Russian state-owned lender Sberbank while GM is thought to prefer RHJ.

But following a meeting on Tuesday between GM negotiator John Smith and Jochen Homann, head of Berlin's "Opel Task Force" and deputy economy minister, the government is now ready to consider RHJ, the Bild daily reported.

The Brussels-based investment group would have to team up with a strategic partner in the auto industry, however, Bild reported, without saying where it got the information.

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 RHJ.

A GM board meeting on Friday failed to choose a buyer, causing irritation and impatience in Germany, and subsequent press reports have said that GM was trying to develop a financing plan to allow it to hold on to Opel.

German Economy Minister Karl-Theodor zu Guttenberg said late on Tuesday that he believed GM still wanted to sell.

"The message that we have received from the firm's management is that they still want to continue looking for an investor," zu Guttenberg told ZDF television.

© 2009 AFP

[vztrt]

GM to sell Opel to Canada's Magna: Merkel

http://news.theage.com.au/breaking-n...0910-fjhl.html

GM to sell Opel to Canada's Magna: Merkel
September 10, 2009 - 11:54PM

German Chancellor Angela Merkel said Thursday that US auto maker General Motors had agreed to sell its Opel unit to Canadian auto parts maker Magna, the buyer she has favoured for a major employer here.

"I would like to inform you that the head of the chancellery was informed a short time ago by (GM chief Fritz) Henderson that GM's board has decided to sell Opel to Magna under the terms we had negotiated," she said, hailing a decision just over two weeks before a German federal election.

"I am exceptionally happy about this decision, which is along the lines of what the government wanted," she told reporters ahead of a GM press conference in Berlin at 1415 GMT.

With GM's decision, Magna and its Russian financiers Sberbank beat out a bid by Belgian investment fund RHJ International.

Germany is home to some 25,000 Opel workers, about half of GM's total European workforce, and the saga over the carmaker's future has loomed large in Merkel's campaign for re-election on September 27.

The powerful head of Opel's works council, Franz Klaus, had already warned of a "cost cutting orgy" if GM decided to hang on to Opel and threatened protests if German factories were closed.

Merkel said German negotiators' "patience, determination and clarity" had paid off in the months-long negotiations.

She said that she would speak with other European leaders in countries with Opel plants to discuss "burden-sharing."

Germany has already ponied up with a 1.5-billion-euro (2.2-billion-dollar) bridging loan to Opel to keep the company afloat and the promise of three billion euros in loan guarantees for Magna.

© 2009 AFP

[vztrt]

http://www.caradvice.com.au/40980/op...d-of-november/

GM to sell Opel to Magna by end of November

September 11, 2009 by Matt Brogan

The General Motors board has chosen to sell 55 per cent of its European subsidiary Opel/Vauxhall to Canadian parts manufacturer Magna International and its Russian partner Sberbank by November 30th.

A senior executive from General Motors said it should close a deal with Magna and Sberbank by the November deadline.

“I see no obstacles to getting the deal done successfully by the end of November,” said Mr John Smith, GM’s chief negotiator for the deal.

Mr Smith said GM will continue to cooperate closely with Magna on platforms, powertrains, manufacturing and purchasing.

GM announced Thursday that it plans to sell a majority stake in Opel and its British sister brand Vauxhall to Magna and the Russian state lender Sberbank.

The deal to go with Magna/Sberbank has come after months of wrangling, during which GM actually considered trying to hold onto the European operation, which provides vital research and development work for the company worldwide.

GM apparently gave up on its attempt to keep Opel/Vauxhall during a board meeting earlier this week, which heard an independent report by financial consultants that said it would need at least US$6.1 billion in additional funds to retain the European operation.

Under the proposal, Magna and Sberbank would each own 27.5 per cent of the company, while Opel employees would hold 10 per cent and GM the remaining 35 per cent.

As part of the deal about 10,000 European jobs will be cut, a quarter of those in Germany.

The German government will provide €4.5 billion (US$6.6 billion) in financing to carry the German-based carmaker through a restructuring period in addition to the €1.5 billion (US$2.2 billion) it loaned Opel in May, Mr Smith said. Other European governments with significant Opel operations will cover some of that amount, he said.

Magna and Sberbank will provide another US$500 million equity investment, Smith said.

Mr Smith said Magna aimed to make Opel profitable by 2011 and the carmaker should be able to repay the government loans used to back the deal by 2014 and begin paying dividends by 2015.

With AutoNews EU

[vztrt]

GM Europe boss says Opel in good hands

http://www.goauto.com.au/mellor/mell...257638000526B4

Tough, but Opel will succeed under Magna, says GM Europe boss

21 September 2009

By JAMES STANFORD in GERMANY

GENERAL Motors Europe president Carl-Peter Foster has warned that Opel’s recovery will be a long, but he insists it is in good hands.

GM announced last week that it intends to sell a 55 per cent stake of Opel and British brand Vauxhall to a consortium led by manufacturer Magna and two Russian banks, including one that is state owned.

Ten per cent of the brand will be owned by Opel employees, leaving just 35 per cent under GM’s direct control.

The deal was brokered German chancellor Angela Merkel, whose German government sweetened it with loans worth €4.5 billion ($A7.6 billion).

GM executives have pledged that no assembly plants will close, a fact that is likely to help Chancellor Merkel in upcoming government elections.

Speaking at the Frankfurt motor show, Mr Foster said Opel executives were pleased with the sale of the majority share.

“We welcome it a lot. We are very happy with this,” he said. “We see a good future. We are mutually complementary.”

Mr Foster called for critics of Opel to be quiet.

“I would like to ask the critical voices to allow us to do our job and watch us show how we can write our own success story,” he said.

Mr Foster added that there was a lot of work ahead of the company.

Opel used the show to present the all-new Astra, a car that will be central to its planned recovery, although it is unlikely to appear in Australia.

It is built of a derivation of the Delta II platform used for the Holden Cruze, but features a revised rear suspension system combining a compound crank set-up with a Watts link, which Opel says is a first.

Eight engine variants will be offered, with power ranging from 70kW to 132kW. The best fuel consumption is 4.6L/100km for the diesels and 6.1L/100km for the petrol units.

Class-leading new technology includes a new generation of what it calls bi-xenon Advanced Forward Lighting which changes the intensity and spread of the light cast to the road and weather conditions.

It has also included the Opel Eye system which uses a special camera to recognise road signs and relay them to the driver on a large screen. It also alerts them if the car leaves its lane.

Opel also presented its own version of the Chevrolet Volt plug-in hybrid, called the Ampera, which it plans to introduce in 2011.

Mr Foster said cars such as the Ampera showed it was crucial for Opel to maintain a good relationship with General Motors.

“It is important to maintain these technical links. Without such co-operation vehicles such as the Ampera would not be possible,” he said.

Opel also used the Frankfurt show to introduce a new slogan: Wir leben Autos, which translates as Cars Are Our Passion.

[vztrt]

http://www.caradvice.com.au/44371/gm...a-by-thursday/

GM to sell Opel to Magna by Thursday

October 14, 2009 by Alborz Fallah

With Hummer and SAAB out of the way, General Motors Co. is likely to finalise a deal to sell its European brand Opel to a group led by Magna International Inc., according to reports from Germany.

The deal which was already agreed to more than a month ago hit turbulence with labor union demands for a veto on factory closures. Workers in the UK and Spain are worried that the 4.5 billion euros ($7.3 billion) in aid committed by the German government to fix Opel will come with conditions to reward the carmaker’s German factories only.

The deal will see GM sell 55 per cent of Opel to Canadian supplier Magna and its Russian partner Sberbank, 10 percent will go to employees in return for 1.2 billion euros in concessions and the old General will still keep a 35 per cent holding.

The interest by Russian’s largest commercial bank (Sberbank) indicates a new direction for the company to push Opel aggressively into Russia. Magna and Sberbank will inject 500 million euros ($810 million) into Opel. The plan involves cutting Opel’s workforce by 10,500 (currently 50,000+) across Europe. Opel has half of its workers in Germany with Belgium, Britain and Spain also heavily involved.

The German plants will continue operating however there are no guarantees for Opel’s Antwerp plant in Belgium and British site of sister brand Vauxhall in Luton.

Vauxhall currently employs approximately 5,500 people in Britain, the majority of them working at the Luton plant.

[vztrt]

GM to keep Opel

http://www.goauto.com.au/mellor/mell...2576630083ACA4

Upbeat General Motors pulls handbrake on deal to sell Opel and Vauxhall to Magna

4 November 2009

By RON HAMMERTON

GENERAL Motors has done an about-face and decided to keep Opel and Vauxhall.

Citing an improved business environment over the past few months, GM’s board decided in Detroit today to pull out of a deal to sell its European operation to parts-maker Magna International and its partner, Russian bank Sberbank.

Instead, GM will present a case to European governments, especially Germany, to restructure GM Europe “in earnest”.

The decision to renege on a commitment to sell the 30,000-employee engineering, manufacturing and sales operation was announced by GM president and CEO Fritz Henderson. Mr Henderson faced strong resistance from fellow board members to dump Opel, which has been a major contributor to GM through its small-car engineering expertise, advanced engine development and sales penetration across Europe and the Middle East for decades.

“We understand the complexity and length of this issue has been draining for all involved,” Mr Henderson said.

“However, from the outset, our goal has been to secure the best long-term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today.

“This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”

If Magna is angry, it did not reveal it in a short statement issued today after being advised by GM of the u-turn.

Magna's co-chief executive officer Siegfried Wolf said: "We understand that the board concluded that it was in GM's best interests to retain Opel, which plays an important role within GM's global organisation.

“We will continue to support Opel and GM in the challenges ahead and wish to thank everyone who supported the Opel restructuring process for their tireless efforts and dedication over the past several months. In particular, we wish to thank our partner, Sberbank, for its significant contribution and support throughout this process."

The decision to sell Opel was made in the depths of the global financial crisis as America’s biggest motor company slid into Chapter 11 bankruptcy. The deal seemed to be sealed in September when the GM board announced it was selling a 55 per cent stake of GM Europe to the Magna-led consortium, which also had the backing of Russian car-maker GAZ.

But conditions are rapidly improving on both sides of the Atlantic, thanks to massive stimulus packages and state aid.

GM has even recorded a five per cent increase in October sales in the US over the same month last year.

The big question now is whether other major stakeholders, including the German government and unions, will simply accept the decision.

GM Europe has been run by a trust set up in the wake of parent company’s financial collapse. Any change to the plans to sell the company will still have to be approved by that board, which includes representatives of the German government and Opel employees.

German chancellor Angela Merkel has actively lobbied for Magna bid to run Opel, pledging €4.5 billion in government guarantees if the Magna deal went ahead.

The future of such guarantees is now up in the air, and it is unclear if Opel could remain viable under GM without them. However, GM might be emboldened by a recent European Commission pronouncement that any government aid should not be tied to any one bid or it would breach competition rules.

The unions are also key to any continuation of GM ownership, as they were harshly critical of the previous GM management that led to the company’s meltdown. They, along with Opel car dealers, were to take a 10 per cent share of the new operation under Magna.

GM has put a price of €3 billion ($A4.9b) on the cost of restructuring the European operation – a cost it says was “significantly lower than all bids submitted as part of the investor solicitation”.

GM’s board will be mindful of the mess it got into in the 1990s when it committed to buy all of Fiat SpA and then pulled out at the last minute – a disaster that cost the company about $1 billion in the wash-up.

Although Australian GM subsidiary Holden is unlikely to say anything publicly about the decision to retain Opel in the GM family, it has been welcomed as a positive move.

Holden has long sourced Opel four-cylinder products and engineering – including the Delta platform under the new Cruze – while Opel and Vauxhall have provided an export market for Holden-made engines and, in Vauxhall’s case, cars in the form of the Commodore-based Vauxhall VXR.

With Holden planning to make a new Cruze-based small car in both sedan and hatchback format from the third quarter of 2010, the sale of the GM Europe operation would have been a blow for future engineering updates and potential export aspirations in Europe.

GM says it will work with all European labor unions to develop a plan for “meaningful contributions to Opel's restructuring”.

It says Opel has been exceeding its “viability plan assumptions” and “liquidity is stable”, but cautioned that time is of the essence.

“While strained, the business environment in Europe has improved,” Mr Henderson said.

“At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.

“We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period.

“We’re also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement.” Instead of selling out a portion of Opel to Sberbank, GM now hopes to step up its Russian alliance with car-maker GAZ.

“GM hopes to build on its already significant business in Russia and resume work directly with GAZ to contribute to both the modernisation of its operations and the joint development of the Russian vehicle market on a mutually attractive basis,” Mr Henderson said.

The about-face by GM comes as no surprise, with rumours of GM unrest over the planned sale at the highest levels of the company.

However, US government representatives on the board of the ‘New GM’ will be keen to make sure that none of the billions of dollars the US administration has poured into saving the Detroit giant will not be spent on other side of the Atlantic saving Opel and Vauxhall.

[Gobes32]

GM / Holden would need to be the worst run companies in the world. They never know if they are coming or going........ I really do believe monkeys could run the place better. They may be the "new" GM, but they still have the same morons running the show.

[R-Design]

Ze German's are not happy!

Originally Posted by AFP, November 5, 2009

The German government blasted GM's decision to hang on to its European unit Opel as workers voiced alarm about a potentially deep restructuring of the company.


The German government blasted General Motors' decision to hang on to its European unit Opel as workers voiced alarm about a potentially deep restructuring of their loss-making company.

GM's decision was "totally unacceptable", Economy Minister Rainer Bruederle told media a day after the US automaker cancelled a planned sale of Opel to the Canadian auto parts group Magna and its Russian partner Sberbank.

The German government said in a statement overnight that it expected GM to repay a E1.5 billion ($A2.45 billion) - loan that it had made to GM.

Berlin had lobbied hard for the sale of a 55 per cent stake in the carmaker, which Magna had said would not result in the closure of German plants though several thousand jobs in the country would have been lost.

"This is unacceptable for the employees eight weeks before Christmas," Bruederle said.

Roland Koch, head of the Hesse regional government, where Opel has its main plant, said he was "shocked and at the same time angry that the months-long efforts to find the best possible solution for Opel have failed at GM".

Germany, where Opel employs around 25,000 people, had offered E4.5 billion ($A7.34 billion) in state aid to Magna and Sberbank after they struck a preliminary deal with GM in September.

GM's announcement dealt a surprise blow to German Chancellor Angela Merkel as she visited Washington and made a rare address to both chambers of the US Congress.

A restructuring by the US group could now mean more German jobs would go that under Magna's plans, with least one plant shut down, workers fear.

In Germany, labour leaders were alarmed by the decision.

"The next step for General Motors will be to blackmail European governments and workers to finance an unworkable restructuring plan," the head of Opel's works committee Klaus Franz said in a statement.

"Labour representatives will not stand for that and will close ranks with the governments," he added.

The head of the works committee at Opel's plant in Bochum, Reiner Einenkel told AFP: "GM needs money to keep Opel running and we'll make sure the government provides the means to protect Opel facilities."

Around half of GM Europe's workforce is employed in Germany, while 4,700 others work at Opel's sister brand Vauxhall in Britain, and most of the rest at Opel plants in Belgium, Poland and Spain.

The head of Germany's IG Metall trade union, Berthold Huber, said its top priority was "to avoid economic layoffs and safeguard the sites".

An announced sale of GM's European unit erupted into controversy as governments in Europe and the United States clashed over which portions of Opel/Vauxhall would be saved and what types of aid would be offered.

GM said it now believes keeping Opel and restructuring the European division itself would be the most cost-effective solution, noting it would soon present its restructuring plan estimated to cost E3 billion euros ($A4.89 billion).

GM chief executive Fritz Henderson vowed to work with European labour unions "to develop a plan for meaningful contributions to Opel's restructuring."

Germany hoped GM would "strengthen the performance of the Opel unit," and "limit the inevitable adaptations to the bare minimum" - a euphemism for job cuts, government spokesman Ulrich Wilhelm said in a statement.

An Opel statement said GM's decision showed it "continues to consider Opel a strategic part of its enterprise".

But German auto expert Ferdinand Dudenhoeffer told the news television channel n-tv that "a restructuring by GM will be much tougher than by Magna".

"GM took a lot of risks by keeping Opel," he added.

http://www.drive.com.au/Editorial/Ar...ID=67025&vf=12

[vztrt]

Thought the Germans wouldn't be pleased about this. They know GM running things is just gonna keep opel in the crapper.

[Bossxr8]

Where's GM going to get the $5 billion needed to restructure Opel. They can't use US government money and I doubt wether banks would loan it to them. They really know how to throw good money after bad.

I guess thats what happens when you leave the same clowns who ran the company into the ground in charge.