New Sasol GTC cars set for thrills

The iconic Grand Prix Circuit will present a new challenge to the GTC drivers as they tackle the country’s fastest racetrack on June 16.

Suzuki’s new Swift hatch and sedan in SA

Suzuki kicks off its new model assault with an all new Swift hatchback and standalone sedan called the Dzire.

GM blamed for stalled Opel deal

2009-05-28 06:53

Berlin - The fate of German carmaker Opel hung in the balance on Thursday after marathon talks on shielding it from the looming bankruptcy of its U.S. parent General Motors ended without a deal.

German ministers told reporters after more than 12 hours of negotiations in Berlin that a bidding battle for Opel had narrowed to a two-way race between Italian carmaker Fiat and Canadian auto parts company Magna.

But they blamed GM and the US Treasury for the failure to agree a plan to tide Opel over until a deal with one of those suitors can be sealed.

"We have made demands on the US Treasury and expect answers by Friday and we will need these answers in order to agree a plan," German Economy Minister Karl-Theodor zu Guttenberg said.

"We don't have the security yet that we need to commit to bridge financing today."

Choosing a final bidder for Opel and closing a deal could take months - time that neither the carmaker nor the German government have with GM expected to file for bankruptcy in days after a crucial bond exchange proposal failed.

To tide Opel over, Germany has put together a 1.5 billion euro aid package. But it has made this aid contingent on the US government and GM agreeing to its plan to temporarily place Opel assets in a trust, a move that would protect its patents and technology from GM creditors.

Finance Minister Peer Steinbrueck said he was hopeful a deal could be reached on Friday that would save Opel.

But he spoke of "surprises and disappointment" with the US negotiators, saying GM had shocked participants by announcing it needed 300 million euros in additional short-term cash.

Roland Koch, premier of the state of Hesse where Opel is based, added: "I think we can say clearly that a big part of the problems tonight came from the combination of new figures from General Motors and a not very helpful negotiating stance from the Americans, from the US Treasury."

Guttenberg said insolvency remained an option for Opel if US negotiators refused to budge.

RHJ out

German Chancellor Angela Merkel had called the meeting to agree a plan to keep the carmaker running while negotiations with suitors are finalised.

Ahead of the meeting Fiat and Magna were seen as the leading contenders for Opel. Afterwards, Steinbrueck said that a third bidder, holding company RHJ, was out of the race.

A fourth bidder, China's Beijing Automotive Industry Corp (BAIC), could still be in the running if it comes up with a more detailed offer.

Although GM will have the final word on who buys Opel, Berlin is playing a crucial role in the sale process because it is being asked to cough up billions of euros worth of loan guarantees as part of any deal.

Opel traces its roots in Germany back to the 19th century and employs about 25 000 staff in four plants here. Its future has become the focus of a furious politically charged debate in Berlin ahead of a federal election in September.

Like its parent GM, which bought a controlling stake in the German carmaker during the economic crisis in 1929, Opel has suffered acutely from the worldwide economic slowdown.

Fiat has presented an ambitious plan to fold Opel and other GM Europe brands Vauxhall and Saab into a transatlantic car empire that would also include new US partner Chrysler.

Magna wants to use Opel and other GM brands to make an aggressive push into the Russian market.

Selling Opel is a major priority for GM, which has been kept in operation since the start of the year with $19.4 billion in emergency federal loans.

The rejection by GM bondholders of a proposed debt-for-equity swap has set the stage for the company to file for bankruptcy by June 1. It would be the largest bankruptcy ever for a US industrial company.


There are new stories on the homepage. Click here to see them.