GM Accelerating Decision on Opel?
By Bill Visnic August 25, 2009Just days after the General Motors Co. board of directors countered the company's management and ordered a reexamination of the favored bid to take majority ownership of GM's Adam Opel AG and most of the company's associated European operations, reports from Europe say GM may announce within a matter of days -- or even hours -- the course it will take with Opel.
GM's abrupt reversal in the months-long process that seemed to be proceeding toward selling Opel to a consortium led by Canadian auto supplier Magna International Inc. riled sensitive German politicians and the country's powerful labor unions, all of whom had made it clear they preferred the Magna bid -- which seeks to minimize German job losses -- to the rival offer from Belgium's RHJ International.
GM's about-face last week, in which it announced the board effectively told company leaders to reconsider GM's options, seemingly signaled to the German interests that GM now might be trying to hedge in light of improving auto-industry and economic conditions on both sides of the Atlantic.
Various reports once indicated GM was seeking a deal to provide for the future buyback of Opel and it is believed GM also is pondering a plan to either raise the billions in capital it needs to simply retain Opel -- or take the unit into bankruptcy and then purchase the most desirable restructured pieces.
There is intense pressure in Germany to see the Magna-led offer accepted. Elections in the country will take place next month and incumbents are anxious to minimize political fallout from whatever job losses result in a change in Opel ownership. And one labor-union leader promised "spectacular measures" if GM cannot quickly come to a decision regarding the sale. -- Bill Visnic
Photo:
1. Insignia VXR sold by Vauxhall, part of GM's European operations also involved in the proposed sale of Adam Opel AG.
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