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Business

Angela Merkel ramps up pressure on GM over Opel

Text by NEWS WIRES

Latest update : 2009-08-24

Just five weeks before German elections, leading politicians are putting pressure on General Motors and the US authorities to choose a candidate to take over GM's troubled Opel unit. Angela Merkel has called for an urgent decision.

Reuters - With just five weeks until German elections, leading politicians on Sunday cranked up the pressure on General Motors and the US authorities to choose a candidate to take over GM's troubled Opel unit.
   
After the company failed on Friday to select between two rival bids, Chancellor Angela Merkel called for a decision to be taken urgently and preferably as soon as next week.
   
"The sooner the better. I wanted it to come on Friday evening. Now, I hope it will be next week," she told ZDF television in an interview to be broadcast later Sunday.
   
"Every day counts, for the workers and for the company's economic situation," she said, according to a transcript of the interview released in advance by ZDF.
   
She added: "I believe we are on the right path. We still need to negotiate. I regret that GM could not come to a final agreement but I hope it will happen soon."
   
Meanwhile, Foreign Minister Frank-Walter Steinmeier, who hopes to unseat Merkel in September 27 elections, said in a statement he had telephoned his American counterpart Hillary Clinton to press Berlin's case.
   
Steinmeier "emphasised that after several months of intensive negotiations, the time had now come for a decision," according to a statement issued by the foreign ministry.
   
"The workers at Opel deserve clarity and a credible prospect for the future," the statement added.
   
He called for a decision "as quickly as possible that safeguards the future of all Opel factories and as many jobs in Germany as possible."
   
The board of General Motors -- which emerged from bankruptcy protection in July -- met on Friday in Detroit to mull the fate of Opel, but said in a statement the meeting ended without any decision being taken.
   
The board discussed two takeover offers on the table -- one from Canadian autoparts maker Magna International and state Russian lender Sberbank, and another from Brussels-based investment group RHJ International.
   
GM is believed to favour RHJ, but Germany has a clear preference for Magna, stressed again by Merkel in her ZDF interview on Sunday.
   
Both bidders want to cut around 10,000 jobs at Opel, but Berlin and the German state governments where Opel has factories prefer Magna because fewer of its job cuts would fall in Germany.
   
The German government's opinion is crucial because it is stumping up several billion euros in loans to sweeten the deal. In addition, around half of General Motors European employees work in Germany.
   
According to press reports, Germany is prepared to offer a 4.5-billion-euro (6.4-billion-dollar) loan to Magna in an attempt to persuade GM to choose the Canadian-led offer.
   
"We want results as soon as possible," a spokesman for Economy Minister Karl-Theodor zu Guttenberg told AFP Sunday.

Date created : 2009-08-23

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