Germany: GM Opel Decision Delayed To Friday Amid New Cash Demand
28 May 2009 - 1:42PM
Dow Jones News
Germany hasn't reached a decision yet on providing state-backed
bridge financing to General Motors Corp.'s (GM) Adam Opel GmbH to
give the unit more time to clinch a deal with a new investor
because the U.S. parent company has come up with new cash demand,
German government officials said early Thursday.
A decision over Opel has been delayed to Friday, Economics
Minister Karl-Theodor zu Guttenberg told reporters after late night
negotiations in Berlin that dragged on into the early hours of
Thursday.
Finance Minister Peer Steinbrueck said GM presented a new cash
demand of EUR300 million, which the federal government is unwilling
to meet. He also said Austrian-Canadian Magna International Inc.
(MGA) and Italian auto maker Fiat SpA (F.MI) are still in the race
for Opel, while inventor Ripplewood isn't anymore.
Chancellor Angela Merkel met with key cabinet ministers,
governors of the German states with Opel plants, representatives
from parent GM and the U.S. Treasury, as well as executives from
the three bidders for Opel.
The meeting was also overshadowed by a rift between the ruling
coalition parties, with the Social Democrats appearing to be ready
to bail out Opel at any cost to safeguard jobs. Zu Guttenberg,
however, early Thursday insisted that an orderly insolvency remains
an option as a final resort.
The German government has been under pressure to make a decision
as it sought to avoid Opel getting embroiled in GM's looming
insolvency proceedings in the U.S. and risking large-scale job
losses at a time when Europe's largest economy is gearing up for
federal elections in September.
Company Web site: www.opel.com
-By Christoph Rauwald and Andrea Thomas, Dow Jones Newswires;
+49 30 2888 4126; christoph.rauwald@dowjones.com;
andrea.thomas@dowjones.com