Magna gets early nod in race for GM's Opel

Outside of Germany, GM Europe has plants that employ a combined 15,000 in Spain, Poland, Belgium and Britain, where British Vauxhall-branded versions of Opel vehicles are produced. Sweden's Saab, also part of GM's assets in Europe, is being sold separately.

CLOCK TICKING

Both General Motors and the German government are in a race against time to finalize a sale of Opel, which is headquartered in Ruesselsheim, near Frankfurt, and traces its roots in Germany to the 19th century.

The U.S. government has given GM until June 1 to restructure its operations or face bankruptcy.

The decision on who gets Opel will be made by GM but the German government will also play a big role because it is expected to provide billions of euros in financing guarantees to the eventual winner.

The bidding process for Opel has been colored by a politically charged debate in Berlin ahead of the federal election.

Chancellor Angela Merkel's conservatives, including Guttenberg, are keen to preserve Opel jobs but want to limit the state's role in any rescue.

The rival Social Democrats (SPD), led by Steinmeier, say the government should do all it can to save Opel and have sought to portray Merkel as insensitive to the fate of its workers.

Marchionne has led a public relations campaign in recent weeks, racing around in a Maserati and his trademark wool sweaters to meetings with top government officials.

Italian Foreign Minister Franco Frattini said late on Friday that Fiat's chances were 50:50 and dismissed talk Magna's bid would be successful as "preliminary skirmishing."

Marchionne wants to create the world's second biggest carmaker behind Japan's Toyota (7203.T) by adding the assets of Opel and Vauxhall to a stable that includes the brands of Fiat and U.S. carmaker Chrysler CBS.UL.

The company has said it foresees less than 10,000 job cuts in Europe, but Germany would be harder hit than under the Magna plan, several politicians said.

MAGNA EYES RUSSIAN MARKET

The Fiat plan is seen by some in Germany, including Opel unions, as overly ambitious and unwieldy.

In addition, Fiat has told the German government it would need up to 7 billion euros in support from relevant governments, about 2 billion more than Magna and RHJ say they require.

Wolf said that under Magna's plan, Russian carmaker GAZ (GAZA.RTS) would be an industrial partner and the goal would be for Opel-GM to gain a 20 percent market share in Russia in the short term and eventually sell 1 million vehicles there.