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Bankruptcy for Opel may still be better as 3 bids have flaws

ALL three bids for General Motors Corp's Adam Opel GmbH unit have shortcomings and a bankruptcy filing might still be better, Germany's economy minister was quoted as saying yesterday.

The three bids filed on Wednesday came from Italy's Fiat SpA, a consortium of Canadian auto parts maker Magna International Inc and Russia's Sberbank, and United States buyout firm Ripplewood Holdings LLC.

"We now have three offers for an Opel takeover, but that doesn't mean that one of them will automatically come to fruition," Economy Minister Karl-Theodor zu Guttenberg was quoted as telling Bild am Sonntag, a German newspaper.

"We must first have a high degree of certainty that the significant tax money we will have to provide is not lost," he added, Bild am Sonntag reported. "From my point of view, none of the three offers so far provides this certainty in a sufficient way."

"If these deficits were to remain, an orderly insolvency would clearly be the better solution, it also could open opportunities for the future of Opel," Guttenberg was quoted as saying.

US parent GM faces a June 1 deadline to restructure or file for bankruptcy. Berlin is keen to ensure the future of the Ruesselsheim, Germany-based car maker.

Opel employs some 25,000 people in Germany, nearly half GM Europe's total workforce.

German officials stress that it is up to GM to choose Opel's investor, while Berlin will decide whether and how to lend state support to the chosen bidder.

Several German politicians have indicated that they favor Magna's bid, though the governor of one of the states that have Opel plants opposes it. Guttenberg has named no favorite.

Fiat's plan, which foresees wrapping Opel and British sister brand Vauxhall into a global car-making giant along with Chrysler LLC, has raised fears in Germany of large job cuts.

Fiat CEO Sergio Marchionne was quoted as telling Bild am Sonntag that "in the worst case, a maximum of 2,000 jobs in Germany would be affected" by the planned integration.


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