Wednesday May 20, 10:13 PM
GM confirms Fiat, Magna, RHJ Int'l as Opel bidders
FRANKFURT (AFP) - General Motors Europe on Wednesday said Italy's Fiat (Milan: F.MI - news) , Canadian autoparts maker Magna and the RHJ International (Brussels: RHJI.BR - news) holding company are in the running to take over its Opel unit, with Germany saying it would choose the preferred suitor early next week.
"The three have all presented formal offers," a GM (NYSE: GM - news) spokesman told AFP. "There were no surprises."
Fiat had earlier in the day revealed it had put down an offer for Opel and its British brand Vauxhall.
The others are Magna, with support from Russian manufacturer GAZ, and Brussels-based RHJ International, whose main shareholder is the founder of the US investment fund Ripplewood.
The German government had asked for detailed bids to be submitted before 6 pm (1600 GMT) in order to determine what state aid might be forthcoming.
The DresdnerKleinwort bank, a unit of the recently part-nationalised Commerzbank (Xetra: 803200 - news) , has been tasked with studying the offers.
The final decision on Germany's Opel, as well as other units of GM Europe including Britain's Vauxhall and Sweden's Saab (Stockholm: SAABB.ST - news) , lies with GM itself and with the US government, but Berlin will sweeten any deal with loan guarantees.
"We do not have too much time," German Labour Minister Olaf Scholz told a press conference just before the expiry of a deadline imposed by the German government for offers for a stake, adding that a decision was due early next week at the latest.
GM is relying on more than 15 billion dollars (11 billion euros) in emergency government loans and faces a June 1 deadline to complete major restructuring or follow fellow US car maker Chrysler into bankruptcy.
GM's chief executive Fritz Henderson said last week that a bankruptcy filing is the "more probable" outcome "given the objectives that we've set for ourselves."
The most prominent bidder for is Fiat, which wants to combine GM's European, Latin American and South African operations with Chrysler to create the world's second largest carmaker behind Japan's Toyota.
The Italian car giant, according to unions, plans to close six units in Europe and South America and lay off some 10,000 workers. The plan, codenamed Phoenix, has been roundly condemned by Opel union officials.
Bidders making a formal offer will be expected to come up with around 650 million euros (886 million euros), the Financial Times (FT) reported on Wednesday, and GM will give preference to cash bids.
This could be a blow to Fiat, with a spokesman telling AFP on Tuesday that the firm intended to offer assets instead of cash, in a similar model to its recent deal securing a stake in Chrysler.
Fiat earlier negotiated a 20-percent stake in bankrupt Chrysler in exchange for its production technology and can increase that to a controlling 51-percent share in the US auto maker as long as Chrysler repays state aid.
RJH International, which has made no official comment so far, has very interesting plans for the company, Klaus Franz, the head of Opel's powerful works council, told the FT.
The fate of Opel, an industrial icon dating back to the 19th century and which directly employs around 25,000 people in Germany, has become a hot-button political issue with barely four months to go until general elections.
Chancellor Angela Merkel, up for a second term in the September 27 vote, is prepared to pull out all the stops to save Opel from collapse but being seen as writing a blank cheque on behalf of taxpayers could hurt her re-election hopes.
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