RUESSELSHEIM/WIESBADEN, Germany (Reuters) - Opel’s senior labor leader threatened General Motors that the European carmaker’s workforce would not pitch in to reduce some $1.2 billion in costs if Detroit retains control of Opel.
“The employees want to make sustainable contributions, but not if we should return to 100 percent control under GM,” Klaus Franz said on Thursday during a visit to Opel’s headquarters in Ruesselsheim by German labor minister Olaf Scholz ahead of parliamentary elections on September 27.
In a twist to the ongoing saga over the fate of Opel, GM Europe President Carl-Peter Forster told the German media just before his company’s board meets next week that the likely future majority owner of Opel would be Magna.
“The greatest probability would be for me Magna, since all prerequisites are fulfilled, the contracts have been negotiated to their conclusion, and the financing is there,” he told Germany’s Die Welt in an interview to be published on Friday.
Company sources said Forster -- whom Magna has requested to stay on to run Opel should it win the deal --- was not speaking for management, where hardliners gathered around senior executives like Bob Lutz and Tom Stephens favored either a rival bid from RHJ or increasingly no sale at all.
Should GM’s board of directors vote next week in favor of a buyback of Opel, this would represent an abrupt departure from previous plans in recent months to give away majority control in its European carmaker to either Magna or RHJ in exchange for billions in government aid to prop up Opel’s operations.
Some 100,000 people in Germany are estimated to have jobs that depend on Opel, making it a hot-button political topic ahead of elections. Opel is also GM’s second largest brand after Chevrolet with an annual output of more than 1 million vehicles.
In comments to German business daily Handelsblatt, the leader of Chancellor Angela Merkel’s conservative parliamentary faction in the Bundestag went so far as to threaten GM that Berlin would call the loan that expires at the end of November.
“Should GM not want to sell Opel, then we will demand back our bridge financing of 1.5 billion euros,” Volker Kauder said.
EXPECTS 1 BILLION EUROS
GM expected governments in the UK, Spain and Poland, home to major manufacturing operations, would provide it with 1 billion euros should the carmaker retain control over Opel, the Wall Street Journal reported on Thursday.
“No direct overtures have been made though,” a source told Reuters.
The amount would not be unrealistic, since Opel’s Franz had said in mid-June that under the Magna concept at least the governments of Spain and the local region of Aragon together planned to contribute 500 million, while the UK would pitch in the same amount with a further 300 million coming from Poland.
Speaking to reporters in Wiesbaden, the conservative CDU premier of Opel’s home state Hesse expressed doubt that GM was planning to buy back its European operations with an investment of its own that could exceed 1 billion euros ($1.43 billion).
“From everything that management is telling us, it is just as clear as before that they expect that the right alternative is a sale of the European part around Opel,” Roland Koch said.
“One billion euros out of America should be invested? Wherever that would then come from, it doesn’t cut it backwards or forwards for anything.”
According to a source close to talks, GM could theoretically hit up U.S. taxpayers for the 1.5 billion euro bill to acquire the 65 percent in Opel formally administrated by trustees as long as the White House consents, although any such decision might have political ramifications in the United States.
“There are restrictions for what the investments would be, so it’s not carte blanche by any means, but we do have the ability to use funds with approval of the U.S. Treasury for our global operations,” a GM spokeswoman confirmed.
“Ensuring that the whole company stays viable is essential to ensure that the company can succeed in repaying the taxpayer dollars,” she explained.
Analysts believe Berlin has all but admitted defeat in its attempt to install Magna and its partner, Kremlin-backed Russian lender Sberbank, as majority owners of Opel against the will of GM’s management and Detroit’s $50 billion benefactor, the U.S. government.
Ferdinand Dudenhoeffer, head of the Center for Automotive Research at the University of Duisburg-Essen, thinks GM wants to sideline and demoralize the German government by playing the various Opel countries in Europe against each other.
“Only talks with (President Barack) Obama offer a chance. Everything else is condemned to fail. Everything else would make the chancellor and her economy minister regrettable losers,” he wrote in an email to the media.
Reporting by Angelika Gruber, additional reporting by Christiaan Hetzner in Frankfurt
Our Standards: The Thomson Reuters Trust Principles.