Magna, GM make progress, no deal on Opel: unions

An Opel sign is pictured near the General Motors German unit Opel's headquarters in Ruesselsheim April 23, 2009.

FRANKFURT (Reuters) - Chief executives of General Motors and autoparts maker Magna made some progress in Friday talks on the sale of GM's Opel unit, but key barriers remain, Opel's top labor leader and board member said on Saturday.

GM chief Fritz Henderson and Magna Co-CEO Siegfried Wolf met in an attempt to jumpstart a stalled bidding process, with unions favoring a deal between the two sides in preference to financial investor RHJ International.

"Progress was made, but there was no final breakthrough," Opel labor leader Klaus Franz told Reuters.

But he said that the fact that GM and Magna executive management had met was a positive signal.

Franz has said that he would ask German Chancellor Angela Merkel and Vice Chancellor Frank-Walter Steinmeier to intervene personally to advance the stalled takeover talks, should no deal be reached by the middle of next week.

"Both sides are trying to approach each other and I think that mid next week we'll be able to see a bit clearer," Franz said.

Ahead of a general election next month, politicians have prodded GM to come to terms with Magna, which wants to expand Opel's full-scale car assembly business and forecasts high growth rates, particularly in Russia, home of its bidding partner Sberbank.

GM's chief negotiator has praised RHJ's offer, but Berlin rejected its first offer for Opel in May and the private equity firm has been unable to undermine widespread backing in Germany for Magna, even after dropping plans to close two German plants.

To make its bid more attractive to the government, RHJ has offered to take only 3.6 billion euros ($5.17 billion) in state aid, down from an initial 3.8 billion euros, but it wants to pay lower sales royalties to GM in return, a source with knowledge of RHJ's offer said.

German daily Die Welt on Saturday cited one person close to matter saying that GM could not make concessions over patents and licensing which Magna is demanding without breaking U.S. patent laws. Magna declined to comment. GM was not available for immediate comment.

(Reporting by Angelika Gruber, Andreas Koener, Joern Poltz; writing by Tyler Sitte; editing by Patrick Graham)