UPDATE 3-GM, Opel Trust signal Magna on track to win Opel
* Opel Trust chairman sees no need to restart sale process
* GM board of directors set to meet this week on Opel sale
* Sources say sale contract may be signed this week
* Opel's Spanish workforce set for protest strikes
(Recasts, adds Spanish strike, EU comment, changes dateline)
By Noah Barkin and Foo Yun Chee
BERLIN/BRUSSELS, Oct 20 (Reuters) - General Motors [GM.UL] looked poised to sign over carmaker Opel to Canada's Magna MGa.TO as fears the EU might scupper the deal were dispelled, but Spanish workers planned strikes to protest looming cost cuts.
EU antitrust regulators have no plans to block Magna's acquisition of GM's European arm, a European Commission spokesman said in Brussels on Tuesday. [ID:nBFA000967]
The statement eased fears the transaction could be scotched by EU Competition Commissioner Neelie Kroes's concerns that German state aid to Opel -- which employs around 50,000 people, half of them in Germany -- may break the bloc's rules. [ID:nBFA000967]
The office of British Industry Secretary Peter Mandelson had said going ahead with the sale of Opel -- including British unit Vauxhall -- to Magna was contingent on satisfying the EU. [ID:nLJ180653]
The deal -- which Magna would hope to conclude within weeks of signing the contract -- hit another snag, though, when Spanish workers at Opel's plant at Figueruelas voted on Tuesday to strike in protest at cuts included in the Magna package. [ID:nLK397288]
With Opel poised to run out of cash by mid-January, it was in nobody's interests to re-open the bidding process for the carmaker, even though Brussels had raised the possibility, Opel Trust Chairman Fred Irwin told German radio on Tuesday.
"We need to think pragmatically," Irwin said.
"That means a decision must come as quickly as possible. It is not in the interests of the Trust to re-open the bidding process because this issue is so complicated," he added.
Germany set up the Trust to prevent Opel from being dragged into parent GM's brief dip into bankruptcy. The trust holds a controlling stake in Opel until a sale goes through.
Kroes wrote to the German government at the end of last week, questioning whether its promise of 4.5 billion euros ($6.74 billion) in aid for Opel had violated EU rules.
She said both GM and the Opel Trust should have the option of re-opening the bidding process, but Irwin said that would be fraught with problems given Opel's precarious finances.
Irwin said he expected the board of directors at GM to take the same approach when it responded to the EU.
"They will meet today or tomorrow and reach a decision. I assume, because they also think pragmatically, that they will reach a sensible solution," he said.
GM Chief Executive Fritz Henderson, in an interview with the Financial Times newspaper, also played down the prospects of restarting the bidding process for Opel.
He told the FT he was "reasonably confident" that the deal with Magna, which is backed by Russian bank Sberbank SBER03.MM, would be signed this week.
The new board formed when GM emerged from bankruptcy in July has shown an independent streak, however. In August it held up a decision on picking German-backed Magna and its partners to buy Opel while it sought more details. [ID:nL8209633]
Should it give a green light now, a contract could be signed this week, two sources familiar with the transaction said.
STORMY WEATHER AHEAD
The scale of the challenge facing Opel's would-be new owners was highlighted by the head of sales at Europe's largest carmaker Volkswagen (VOWG.DE), who said he expected car sales in Germany to fall below 3.0 million units in 2010 from 3.7 million this year once scrappage incentive schemes end. [ID:LK413051]
Belgian-based financial investor RHJ International (RHJI.BR) has said it is no longer interested in Opel, while carmakers Fiat (FIA.MI) and BAIC have declined comment on whether they could re-enter the hunt.
Closing the deal now hinges on whether Opel workers will commit to sweeping cost concessions in return for a 10 percent stake in Opel and on lining up a financing package.
Magna's group had originally proposed cutting around 10,500 Opel jobs in Europe, but has been whittling down that number in negotiations with Opel labour.
The big sticking point remains Spain, where unions said on Tuesday they would hold four one-day strikes. [ID:nLK397288]
Magna and Sberbank, keen to use Opel as a springboard for a sales offensive in Russia, are due to get 55 percent of Opel, while GM would keep 35 percent.
Clinching the deal would crown the career of Magna founder Frank Stronach, who left Europe a virtually penniless toolmaker half a century ago but became a billionaire while building one of the world's biggest car part groups. [ID:nLU499895]
For a FACTBOX on Opel plants in Europe click [ID:nLF606261]
For a TIMELINE click [ID:nLF568734]
(Additional reporting by Robert Hetz and Alexander Huebner; Writing by Michael Shields and Helen Massy-Beresford; editing by John Stonestreet)
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