Finish line nearing for Opel bailout?
BERLIN 鈥� The bids are in for Germany鈥檚 beleaguered carmaker . Now, the government here in the coming days will decide which one of three potential investors to back.
As expected, iconic Italian carmaker made its official non-cash bid for Opel, a subsidiary of Detroit giant GM, Wednesday (Fiat has already acquired a majority stake in Chrysler 鈥� to view a recent Monitor story on Fiat, click here). Also in the running is Magna, a Canadian car parts manufacturer, and RHJ International, a Dutch division of a US private equity fund.
The German government is scrambling to make a quick decision, which could come as soon as early next week. On Wednesday evening, lawmakers set up a special 鈥淥pel task force鈥� to weigh all three bids.
鈥淲e do not have much time,鈥� Labor Minister told Agence France Presse.
Ultimately, Opel鈥檚 fate rests with GM. But the German government鈥檚 opinion in the matter is seen as key, since any deal for Opel is going to involve hefty loan commitments from Berlin 鈥� as much as $9.3 billion, according to some estimates (for recent Monitor coverage of Germany's auto woes, look here).
Of the three bidders, Fiat enjoys the name recognition most closely associated with cars. The Italian company is making a play for both Opel and Britain鈥檚 Vauxhall, also owned by GM. If successful, it would become the second largest car manufacturer in the world behind Japan鈥檚 Toyota.
Magna is bidding in cooperation with Russian automaker GAZ and Sberbank, Russia鈥檚 top state-backed lender. Although primarily a manufacturer of car parts, Magna does build vehicles for a number of different automakers through its Austrian contracting firm Magna Steyr.
, owned by US private equity fund Ripplewood, is perhaps the least known player in this deal, and has so far kept its intentions for Opel close to its vest.
German news magazine reported Thursday that internal rankings obtained from GM suggest that the Detroit鈥檚 top carmaker is leaning towards Magna as the best choice for its European businesses, with Fiat coming in last out of the three bidders.
Meanwhile, Opel employees announced this week that they have come up with a 鈥減lan B鈥� that could help save their employer. Opel鈥檚 work鈥檚 council told Germany media that employees have agreed to wage cuts that would net $1.4 billion in savings, enough to buy a significant, though not majority, stake in GM.
Speaking to the , Klaus Franz, the head of the work鈥檚 council, said, 鈥淚f all else fails, Opel's employees and dealers will present their own offer.鈥�
