Only Magna left
May 29, 2009
The Italian carmaker Fiat said in a statement on Friday that it was suspending talks with the German government over its bid for Opel and that it would not be in attendance at the emergency meeting in Berlin.
CEO Sergio Marchionne said it was “unreasonable” to provide Opel with emergency funds while the government decides the timing and conditions of that financing,” adding that it would expose his company to “unnecessary and unwarranted” risks. He did say, however, that his company was still interested in taking over GM's European unit.
The feud over 300 million euros
Leading into Wednesday's first meeting, which ended acrimoniously and without results, Germany was set to make a decision on which company it thought should take over Opel, but negotiators were shocked when GM began the meeting by asking for an extra 300 million euros ($426 million) in loans. Germany had already promised to provide 1.5 billion euros to cover Opel's split from its parent company GM.
GM CEO Fritz Henderson said on Thursday that the request had nothing to do with “extra” funding. He said GM needed the funds up front, which were to come from the promised 1.5 billion euros, to keep Opel afloat while a takeover deal was finalized.
However, Germany's Economics Minister Karl-Theodor zu Guttenberg is strictly against providing funds to GM until a deal has been finalized.
"The goal of the Americans is to get as much money as they can from the Europeans," Guttenberg said in an interview broadcast on German public television on Thursday. "My goal is to prevent German taxpayers' money from flowing to the United States.”
The US dismissed the claims, with a Treasury spokesman saying that it didn't want American taxpayers' dollars being spent to support Opel. The spokesman went on to say that the US would do everything it could to make sure Friday's meeting ended with “constructive results.”
Guttenberg has said Germany wants to put the 1.5 billion euros in government funds along with Opel's assets in a trust fund to shield it from GM until the auto giant files for bankruptcy. GM announced on Thursday that it had reached a debt-for-equity swap deal with major bondholders, the clearest sign yet that a Chapter 11 filing is imminent.
EU carefully watching GM-Opel split
Meanwhile, the European Union has voiced its concern over Germany's handling of the GM dissolution and called a meeting of the bloc's trade and economy ministers to discuss the future of Opel in Europe, insisting that any solution must comply with EU-state aid rules and anti-protectionist policies.
In addition to the plants in Germany, GM has Opel plants in Belgium, Poland and Spain; Vauxhall plants in Britain; and Saab plants in Sweden.
Officials in Belgium, in particular, where 2,600 people work at the Opel plant in Antwerp, are worried that GM will only keep Germany in mind when considering the future of Opel.
“I think it is very important to underline that the solution is a solution for all the EU member states and that it's not only Germany,” Flemish Premier Kris Peeters said on Thursday.
The European Commission has appealed to national governments to avoid moves that would ensure the survival of Opel factories on their soil at the cost of others elsewhere. EU Industry Commissioner Günther Verheugen said that a meeting being held in Brussels on Friday was a chance for German officials to update their EU counterparts as to what measures are being considered to prop up
Opel.
Meanwhile in Berlin, the planned Friday meeting between German officials and representatives of Magna and GM was suddenly postponed for several hours.
Media reports quoting German government officials now say that Austrian-Canadian car parts supplier Magna has reached a preliminary agreement with General Motors on the terms of a takeover of Opel. dpa news agency reports that German Vice-Chancellor Frank-Walter Steinmeier mediated the agreement during talks with Magna chief executive Frank Stronach. A number of questions remain unresolved, however, including the appointment of a board of trustees to oversee Opel - a move demanded by Berlin but opposed by the US administration
glb/dpa/AFP/Reuters/Bloomberg
Editor:Chuck Penfold/Susan Houlton