More Delay for Sale of GM's Opel
October 23, 2009
Anyone - or is it everyone at this point - hoping for an October finish for the saga of General Motors Co.'s sale of its Adam Opel AG European operations will have to wait at least a while longer.
In a blog at GM's website, John Smith, GM's group vice president of business development and the company's lead negotiator, said GM's deal to sell Opel to a consortium headed by Canada's Magna International Inc. and Russia's Sberbank will be on hold until at least early November.
The deal has won approval from the Opel Trust Board, but the European Union expressed concern about several details and their potential transnational effect on labor in various nations in which Opel operates.
The EU also "has been reviewing the Opel investor process and the circumstances surrounding the selection of Magna/Sberbank," Smith said in the blog. Some EU member nations have expressed skepticism that GM's decision to sell to the Magna/Sberbank group was based solely on business metrics.
German Economy Minister Karl-Theodor zu Guttenberg, responding these concerns, apparently asked GM for reassurance the sale to Magna/Sberbank was not affected by political concerns.
"Given the significance of the Opel transaction, GM's Board will soon meet in its regularly monthly meeting (November 3) to consider Minister zu Guttenberg's letter and changes to the Magna/Sberbank proposal that have occurred since its last review on September 9," Smith said in the blog.
"In the meantime, work will continue to resolve remaining open points with the Magna/Sberbank proposal--for example, related to labor-cost reductions and the government-backed financing package -- to document the related understandings, and complete all preparations for the signing of binding agreements should that be authorized by GM's Board at the November 3 meeting," Smith continued.
Some interests in the EU have suggested that Germany, which contains the bulk of Opel facilities, favored the Magna/Sberbank proposal because of it seemingly promised the most minimization of labor-reduction measures. But questions rose about whether the promise of billions in financial aid from Germany was extended only to the Magna consortium's bid, effectively stifling the possibility of Opel being sold to any competing bidders.
The German government reportedly gave assurances this week that no such favoritism for any bidder existed. - Bill Visnic, senior contributing editor
Photo of Opel Ampera concept car courtesy General Motors Co.
Posted by Bill Visnic at 11:23 AM under Business , Companies , GM , News | Comments (0) | digg this | Seed Newsvine
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