Fiat CEO in discussion on Opel bid
05-29-2009 | 07:12 AM
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Fiat CEO in discussion on Opel bid
Fiat CEO Sergio Marchionne met German Chancellor Angela Merkel Tuesday to discuss his bid for ailing General Motors Corp.’s Opel unit as a decision on the company’s future nears.
Marchionne drove out of the chancellery in a black Fiat car after about an hour without speaking to reporters. Merkel also made no public appearance.
Merkel’s government is examining three bids for German-based Adam Opel GmbH: from Fiat SpA, a consortium of Canadian auto parts maker Magna International Inc. and state-controlled Russian lender Sberbank; and New York-based buyout firm Ripplewood Holdings LLC.
With many German politicians indicating a preference for Magna, Marchionne has sought to allay fears that Fiat’s offer — which foresees wrapping Opel into a global powerhouse along with Chrysler LLC — would mean drastic job cuts.
Merkel has said that decisions will have to be made in midweek, though the choice of an investor ultimately falls to GM and the U.S. administration. Germany would decide on whether to provide assistance, and if so what kind.
Germany’s Tagesspiegel daily reported, without citing sources, that Merkel plans a meeting at the chancellery Wednesday with the CEOs of all three bidding companies, U.S. government representatives and governors of the four German states that have Opel plants. The government would not confirm the meeting.
Merkel said Monday that Fiat wants to detach the company completely from GM, “and we don’t know now whether GM and the American government want something like that.” Magna’s bid envisions GM keeping 35 percent of Opel.
Opel employs some 25,000 people in Germany, nearly half GM Europe’s total work force. With elections looming in September, Berlin is keen to save as many jobs as it can.
U.S. parent GM faces a June 1 deadline to restructure or file for bankruptcy.
Germany has pledged bridge financing to keep Opel running; it likely will have to support a new owner with loan guarantees, and is keen to ensure that taxpayers’ money does not get drawn into U.S. bankruptcy proceedings.
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Marchionne drove out of the chancellery in a black Fiat car after about an hour without speaking to reporters. Merkel also made no public appearance.
Merkel’s government is examining three bids for German-based Adam Opel GmbH: from Fiat SpA, a consortium of Canadian auto parts maker Magna International Inc. and state-controlled Russian lender Sberbank; and New York-based buyout firm Ripplewood Holdings LLC.
With many German politicians indicating a preference for Magna, Marchionne has sought to allay fears that Fiat’s offer — which foresees wrapping Opel into a global powerhouse along with Chrysler LLC — would mean drastic job cuts.
Merkel has said that decisions will have to be made in midweek, though the choice of an investor ultimately falls to GM and the U.S. administration. Germany would decide on whether to provide assistance, and if so what kind.
Germany’s Tagesspiegel daily reported, without citing sources, that Merkel plans a meeting at the chancellery Wednesday with the CEOs of all three bidding companies, U.S. government representatives and governors of the four German states that have Opel plants. The government would not confirm the meeting.
Merkel said Monday that Fiat wants to detach the company completely from GM, “and we don’t know now whether GM and the American government want something like that.” Magna’s bid envisions GM keeping 35 percent of Opel.
Opel employs some 25,000 people in Germany, nearly half GM Europe’s total work force. With elections looming in September, Berlin is keen to save as many jobs as it can.
U.S. parent GM faces a June 1 deadline to restructure or file for bankruptcy.
Germany has pledged bridge financing to keep Opel running; it likely will have to support a new owner with loan guarantees, and is keen to ensure that taxpayers’ money does not get drawn into U.S. bankruptcy proceedings.
More...
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