The fate of German carmaker Opel hung in the balance yesterday after marathon talks on shielding it from the looming bankruptcy of its US parent General Motors (GM) ended without a deal.
German ministers told reporters after more than 12 hours of negotiations in Berlin that a bidding battle for Opel had narrowed to a two-way race between Italian carmaker Fiat and Canadian auto parts company Magna.
But they blamed GM and the US Treasury for the failure to agree a plan to tide Opel over until a deal with one of those suitors can be sealed.
PHOTO: AFP
“We have made demands on the US Treasury and expect answers by Friday and we will need these answers in order to agree a plan,” German Economy Minister Karl-Theodor zu Guttenberg said.
“We don’t have the security yet that we need to commit to bridge financing today,” he said.
Choosing a final bidder for Opel and closing a deal could take months — time that neither the carmaker nor the German government have with GM expected to file for bankruptcy in days after a crucial bond exchange proposal failed.
To tide Opel over, Germany has put together a 1.5 billion euro (US$2.1 billion) aid package. However, it has made this aid contingent on the US government and GM agreeing to its plan to temporarily place Opel assets in a trust, a move that would protect its patents and technology from GM creditors.
German Finance Minister Peer Steinbrueck said he was hopeful a deal could be reached today that would save Opel.
But he spoke of “surprises and disappointment” with the US negotiators, saying GM had shocked participants by announcing it needed 300 million euros in additional short-term cash.
Roland Koch, prime minister of the state of Hesse where Opel is based, said: “I think we can say clearly that a big part of the problems tonight came from the combination of new figures from General Motors and a not very helpful negotiating stance from the Americans, from the US Treasury.”
Guttenberg said insolvency remained an option for Opel if US negotiators refused to budge.
German Chancellor Angela Merkel had called the meeting to agree a plan to keep the carmaker running while negotiations with suitors are finalized.
Ahead of the meeting, Fiat and Magna were seen as the leading contenders for Opel. Afterwards, Steinbrueck said that a third bidder, holding company RHJ, was out of the race.
Fiat has presented an ambitious plan to fold Opel and other GM Europe brands — Vauxhall and Saab — into a transatlantic car empire that would also include new US partner Chrysler.
Magna wants to use Opel and other GM brands to make an aggressive push into the Russian market.
A fourth bidder, China’s Beijing Automotive Industry Corp (北京汽車工業), could still be in the running if it comes up with a more detailed offer.
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