Meeting in Berlin
May 27, 2009
In a move aimed at preparing the sale of Opel and its other European operations, GM has transferred all its assets including patents debt free to Opel.
"This way it can join a partnership with a potential investor. You have one company that would be invested in or would sell a stake," said GM's Europe spokeswoman Karin Kirchner.
Earlier the head of Opel's works council said he had seen a copy of the document outlining the split between General Motors and its European subsidiary. In an interview with German public TV broadcaster ZDF on Tuesday, Klaus Franz said the confusion surrounding the Opel takeover would soon come to an end.
“Everything looks good and seems to be going in the right direction. What's important is that we can finally stop playing the waiting game and that Opel finds a new partner,” he said.
Question and answer session
Wednesday's meeting included representatives of the three bidding companies, Magna International, Fiat, and Ripplewood International, as well as a host of government officials.
Chancellor Angela Merkel and Economics Minister Karl-Theodor zu Guttenberg were joined by the state premiers of the four German states where Opel plants are located. GM-Europe's chief executive Carl-Peter Forster was also in attendance, along with a US Treasury representative.
The final decision is still in the hands of Opel's parent company, GM, but the US company is likely to be swayed by Berlin's choice for bidder, given Germany's intention to provide billions in loans to support the deal.
The bidding CEOs were subjected to interviews which ran late into the night.
No favorites at this point
On Tuesday, Germany pressed the three main bidders to improve their offers for Opel. The government said they needed to assume greater risks and make credible commitments to preserve jobs at the four Opel plants in the western German cities of Rüsselsheim, Bochum, Eisenach, and Kaiserslautern.
Economics Minister zu Guttenberg told reporters after meeting Fiat Chief Executive Sergio Marchionne in Berlin that the Italian carmaker's offer looked serious but that the other bidders remained in contention.
"There's no favorite," he said, adding that all three “know that improvements are still necessary."
Last week, the economics ministry said the Magna bid, backed by Russian investors, looked the best of the three. According to Germany's Frankfurter Allgemeine Zeitung newspaper, however, Berlin has become sceptical about Magna's plans to not invest any of its own capital in Opel, which it fears could plunge the carmaker into debt.
At the same time, the other bidders have stepped up their offers.
Marchionne made a last-ditch effort to get Berlin behind his plans for Opel on Tuesday, saying he was willing to lower his request for state guarantees to 6 billion euros ($8.4 billion), 1 billion euros less than what he was previously asking.
In an unexpected twist, Chinese carmaker Beijing Automotive Industry Holding Co (BAIC) has emerged as a last minute contender, after reportedly submitting a bid late on Tuesday. BAIC first expressed interest in a partnership with Opel after last week's deadline for bids had expired.
The government hasn't ruled out insolvency as a last resort should it fail to determine a bidder for an Opel takeover.
On the brink
Pressure to agree on a partner is high for GM as it is on the edge of insolvency. The US government has given the company until the end of May to come up with a restructuring plan, but after a last attempt to rid itself of debt failed, this looks more and more unlikely.
GM bondholders had until midnight on Tuesday to trade $27 billion in debt for a 10-percent ownership stake in the reorganized company, but reports say the deal failed.
glb/dpa/Reuters/AP
Editor: Robert Mudge