The game of brinkmanship that General Motors has been playing over the future of its loss-making European subsidiary, GM Europe, which makes Opel and Vauxhall vehicles, has started to unravel it would seem.
GM has been suggesting for more than a week that it was about to decide between two suitors for Opel/Vauxhall and would announce the fate of the European company immediately.
However, no decision has yet been announced and the German Chancellor, Angela Merkel, whose government ultimately controls the purse strings that will finance a rescue, has now expressed her frustration with GM’s lack of a decision.
Chancellor Merkel expressed her regret at GMs’ failure to choose a buyer for Opel/Vauxhall, and said that a decision was “urgently” needed for the carmaker’s future.
In an interview with German ZDF television, Ms Merkel said she felt there might be a conflict of interest between GM and countries with a stake in its European operations, but that progress was being made.
“I regret that a final decision wasn’t made, but I hope it will happen soon, because both for the workers and the economic situation at Opel, we urgently need a decision,” she said.
“The conflict of interest could be that we think Magna has made a very good offer … which makes GM a minority shareholder in the whole set-up, and there may be voices at GM … who’d prefer that this minority shareholding wasn’t so marked,” she said.
Despite German pressure to back a bid by Magna International, General Motors Company on Friday declined to name the Canadian automotive firm as the winning bidder for Opel/Vauxhall, leaving the fate of the carmaker up in the air.
Mindful of a federal election due on September 27, the German government has offered financial backing for Magna’s bid because it believes it would be the best option to save jobs at Opel, which employs around 25,000 workers in Germany.
German politicians have urged the United States government to help broker a deal, and the Foreign Ministry said it had contacted the US administration at the weekend with this in mind.
Extending the wait on the firm’s future sparked a round of angry reactions from German politicians at the weekend, who reaffirmed their support for Magna’s bid.
“Now I hope we’ll make progress this week,” Ms Merkel said.
“I think we’ve moved things along well … and that we’re not far from the end, and hopefully we’ll be at the end soon.”
Sources familiar with the talks said GM directors wanted Berlin to say what financing would be available to back a rival Opel bid by Brussels-based financial investor RHJ International, which is said to be disposed to selling Opel back to GM at a later date.
Berlin and the German states that host Opel plants have made clear they want Magna to get the carmaker and are set to provide €4.5 billion (US$6.4 billion) in state aid to make it happen.