German economy minister hopes for GM's decision on Opel by today

ERJ staff report (AN)

Abensberg, Germany (Reuters) -- German Economy Minister Karl-Theodor zu Guttenberg said on Monday he hoped the board of General Motors Co. would make a clear decision on the future of its European unit Opel when it meets today.

Frustration with GM over Opel is mounting in the German government, which has come out strongly in favour of Canadian auto parts group Magna's bid for the carmaker.

On Friday, Guttenberg said the government expected the GM board to make a "fundamental decision" on the future of Opel this week.

Speaking on German public TV station ARD, Guttenberg said there were offers for Opel which were ready to be signed and that it was time for its US parent to "give in."

"We're still negotiating toward an investor solution -- that is an industry-based plan which will be valid in the longer term," he said, suggesting Berlin did not expect Opel to stay with GM, a possibility that has recently gained currency.

The German government has been pushing GM to accept a bid for Opel by Canadian supplier Magna International Inc., though Belgian-based investor RHJ International SA is also in the running.

In comments published on Thursday, the head of GM Europe, Carl-Peter Forster, told Germany's Die Welt newspaper he believed Magna is most likely to win a bidding battle for Opel, but that the carmaker could also thrive under the ownership of its U.S. parent.

However, company sources said Forster -- whom Magna has requested to stay on to run Opel should it win the deal -- was not speaking for management, where hardliners gathered around senior executives such as Bob Lutz and Tom Stephens favor either a RHJ's bid or no sale at all.

Opel, which employs about 25,000 in Germany, has been on the political agenda for months in Europe's largest economy, which holds a federal election on Sept. 27.

In an interview published on Friday, Chancellor Angela Merkel said she still expected Opel to be hived off from GM.

"We have no indication that GM is moving away from an investor-based solution," Merkel told the Westdeutsche Allgemeine Zeitung daily.

Opel's senior labor leader, Klaus Franz, on Thursday threatened GM that his work force would not pitch in to reduce about $1.2 billion in costs if Detroit retains control of the European unit.

From Automotive News (A Crain publication)