WRAPUP 2-US to leave Opel choice to GM; Opel union protests

Mon Aug 24, 2009 4:31pm EDT
 
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* Obama administration to leave Opel buyer choice to GM

* German labor union protests GM delay with wage demand

* No state loan for RHJ bid: German finance minister (Adds Steinbrueck comments, analyst's comments)

By David Lawder and Christiaan Hetzner

WASHINGTON/FRANKFURT, Aug 24 (Reuters) - The Obama administration pledged on Monday to stay out of General Motors' choice of a buyer for its European Opel unit, while union leaders in Germany put more pressure on the U.S. automaker to make a decision.

Negotiations over Opel, which General Motors Co [GM.UL] is selling as part of a U.S. government-orchestrated restructuring, have dragged on for months, frustrating its 50,000 European employees.

On Monday, labor leaders for Opel's 25,000 workers in Germany protested the delay by rescinding an agreement to forego their vacation pay, demanding some 70 million euros ($100.1 million) in cash next week, sources familiar with the action told Reuters.

"This is the first warning shot," said one of the sources, who requested anonymity.

GM had been expected to reach a decision on Friday on whether to sell Opel to a group led by Canadian automotive company Magna International (MGa.TO), Berlin's favored bidder, or to Brussels-based investment firm RHJ International (RHJI.BR), but it failed to make a final decision.

Instead, the board asked the German government for more information about state financing for an RHJ bid, sources familiar with the meeting told Reuters on Friday. [ID:nNLL484019]

GM emerged from bankruptcy protection in July with 60 percent government ownership, after receiving $50 billion in loans from U.S. taxpayers.

But White House Deputy Press Secretary Bill Burton said on Monday that President Barack Obama's administration had no plans to get involved in GM's decision regarding Opel.

"The president's view is that decisions made on the day-to-day operations of General Motors should be made by the folks at General Motors. He never wanted to get into the auto business and he's happy for them to make their decisions and get back on their feet," Burton said at a press briefing in Oak Bluffs, Massachusetts, where Obama is vacationing.

NO STATE LOAN FOR RHJ

As German government officials grew increasingly anxious over Opel, Finance Minister Peer Steinbrueck called GM's delay "annoying" and urged a quick decision.

In an interview to be published in the Handelsblatt newspaper on Tuesday, Steinbrueck was quoted as saying the government had a clear preference for the Magna group and would not offer bridge financing to RHJ.  Continued...

 

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Monday, 24 Aug 2009 05:33am EDT 

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