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August 24, 2009

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GM told to decide on bid soon

GERMAN Chancellor Angela Merkel yesterday said General Motors Corp needs to make a decision soon on the future of its Opel unit, and that she hoped for progress this week.

In an interview with ZDF television aired yesterday, Merkel said that despite stumbles last week, "we are still well along the way."

GM last Friday made no decision between bids from a consortium led by Canada's Magna International Inc and Brussels-based investor RHJ International SA.

The board instead questioned the aid package offered by the German government in the deal because it only had an option to fund the Magna group.

Merkel said she regretted that a decision wasn't made, but she recognized that there was still negotiating to be done and she hoped "we can move ahead in the next week."

"For the employees, and also for the economic situation at Opel, it is imperative that we get a decision," she said. "Every day counts."

The German government has been clear that it wants the Magna group - which includes Russian lender Sberbank - to gain the controlling interest in Opel. GM has said it would prefer RHJ because the Magna-Sperbank bid raises the possibility of GM patents and other intellectual property falling into competitors' hands.

Though the decision on Opel's future lies with GM, the German government is a player because it is offering financial help to make a deal possible.

The government has said Germany was prepared to provide in full the 4.5 billion euros (US$6.4 billion) credit sought for the Magna bid to avoid lengthy talks with other European countries that have Opel facilities.


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