Minister says Opel bids fall short

German Foreign Minister Frank-Walter Steinmeier said it was "good that there is now a real bidding competition."

By
May 25, 2009 10:25
2 minute read.

All three bids for General Motors Corp.'s Opel unit have shortcomings and a bankruptcy filing might still be a better option, Germany's economy minister was quoted as saying Sunday. The three bids filed last Wednesday by potential investors came from Italy's Fiat SpA, a consortium of Canadian auto parts maker Magna International Inc. and Russia's Sberbank, and US buyout firm Ripplewood Holdings LLC. "We now have three offers for an Opel takeover, but that doesn't mean that one of them will automatically come to fruition," Economy Minister Karl-Theodor zu Guttenberg was quoted as telling the Bild am Sonntag newspaper. "We must first have a high degree of certainty that the significant tax money we will have to provide is not lost," he added, Bild am Sonntag reported. "From my point of view, none of the three offers so far provides this certainty in a sufficient way." "If these deficits were to remain, an orderly insolvency would clearly be the better solution - it also could open opportunities for the future of Opel," Guttenberg was quoted as saying. US parent GM faces a June 1 deadline to restructure or file for bankruptcy. Berlin is keen to ensure the future of Ruesselsheim, Germany-based Adam Opel GmbH. Opel employs some 25,000 people in Germany, nearly half GM Europe's total work force. German officials say it is up to GM to choose Opel's investor, while Berlin will decide whether and how to lend state support to the selected bidder. Foreign Minister Frank-Walter Steinmeier said it was "good that there is now a real bidding competition." Steinmeier, the center-left challenger to conservative Chancellor Angela Merkel in September's elections, also took a swipe at the comments by Guttenberg, a conservative. "I advise everybody finally to stop the talk about an Opel insolvency," he said. "We should focus all our energy on saving as many jobs as possible at Opel instead of raising new specters." Several German politicians have indicated that they favor Magna's bid, though the governor of one of the states with Opel plants opposes it. Guttenberg has named no favorite. Fiat's plan, which foresees wrapping Opel and British sister brand Vauxhall into a global car-making powerhouse along with Chrysler LLC, has raised fears in Germany of large job cuts. However, Fiat CEO Sergio Marchionne was quoted as telling Bild am Sonntag that "in the worst case, a maximum of 2,000 jobs in Germany would be affected" by the planned integration.


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