GM Europe Sale

[csv8]

Fiat has set its sights on becoming one of the world's leading carmakers, signalling an interest in taking a stake in General Motors (NYSE: GM - News) ' European business as it rushes to cement an alliance with Chrysler.

The Italian carmaker is among up to seven suitors for a stake in GM Europe, of which Germany's Opel forms the largest part and which includes the UK'sVauxhall, several government and car industry sources have told the Financial Times.

News of the talks comes as Fiat, whose chief executive Sergio Marchionne has declared the world's oversupplied automotive industry ripe for consolidation, moves closer to a tie-up with GM's rival Chrysler, which has six days to prove to the US government that it can become viable, or face bankruptcy.

"Fiat has expressed its interest to the German government," people close to Opel said on Thursday. Canadian car parts maker Magna International was also interested in GM's European operations, said Hendrik Hering, economy minister for the German state of Rhineland-Palatinate.

But industry insiders and Fiat itself warned a deal was not imminent as there remained questions over how Opel and Vauxhall could be split from GM. One executive said: "It is like trying to separate an egg from an omelette."

Mr Marchionne said the Italian carmaker had not held direct talks with Opel, adding that wrapping up the partnership with Chrysler was "my first and foremost objective".

However, he served notice he intended to lead industry consolidation, saying Fiat was "a willing player" and wanted to produce 5m-6m cars per year, almost triple the 2.2m it makes now.

"We have open dialogue with a number of automotive companies around the world," said Mr Marchionne. "We are going to be part of a consolidation exercise."

Fiat's boss has in five years transformed the carmaker from alaggard to an efficient producer of small cars. However, amid a global downturn and the worst crisis for the car industry in decades, its sales have suffered and the company on Thursday reported a €411m first-quarter loss.

A sale of Opel to Fiat is favoured by the German federal government. But it would face objections from regional governments and Opel's powerful works council, which fears plant closures and job losses given the large overlaps between the two carmakers.

"Even the strongest child can't bear two sick parents," Armin Schild, an Opel supervisory board member and regional trade union leader, said.

Mr Marchionne said that Europe's car industry could consolidate without the radical downsizing seen in the US, which he said was "not in the culture of European society".

Fiat is riding high on an endorsement from Barack Obama, US president, as a potential saviour of Chrysler. However, the US carmaker must still secure concessions from debtholders and its unions in the US and Canada by next week. Mr Marchionne, who has spent much of the past month in America, flew to Washington on Thursday for talks with President Obama's automotive taskforce.

If the Chrysler talks succeed, Fiat will take an initial 20 per cent stake in a partnership that would see them join forces on technology, production, models and dealerships.
Companies: Fiat SpA ;General Motors Corp ;Vauxhall Motors Ltd ;General Motors Corp ;

[belvo]

seriously weres all this money coming from they seem to want to buy all these bankrupt company but good on if they do they could put a ferrari engine in a vauxhall

[Ghiadude]

big *** mortgage? If theyve got cash reserves then now is the time to spend them as youll get the most for your dollar.

[Elks]

Fiat have accumulated billions in cash since they separated from GM. And they are Itailans. So they know how to crunch a deal.

They got the US Govt to put up the billions so they could buy 20% of Chrysler and they would also be likely to pick these up for what they owe. And they are banging the German Govt to stump up the cash. To save jobs of course.

If they pull this off they will become the worlds 2nd largest automaker relatively cheaply.

Only scary part is imagining a SAAB with Fiat build quality.... :

[mik]

they also mentioned Saab on the radio this morning into the fiat bargain and if it goes ahead will be bigger than GM....

[Dave_au]

There still needs to be some form of synergy (excuse the management consulting term) or economies of scale to make this work.

Everyone seems to have forgotten the DaimlerChrysler conglomorate of the late 90s/early 2000s which included Mercedes Benz and brands, Chrysler and brands and Mitsubishi. The only one to escape relatively unharmed from the "merger" was Mercedes Benz. Mitsubishi was licking it's wounds for a good three years afterwards and the basketcase Chrysler is still a basketcase.

[vztrt]

While its about the Chrysler/fiat situation it does talk about opel and SAAB.

http://news.theage.com.au/breaking-n...0506-auwk.html

US court clears way for Chrysler-Fiat deal
May 6, 2009 - 2:09PM

A US bankruptcy judge has approved a fast-track sale plan proposed by the Obama administration to shore up ailing automaker Chrysler, clearing the way for a possible partnership with Fiat.

At the end of a hearing that lasted nearly eight hours, federal bankruptcy judge Arthur Gonzales rejected the arguments from a group of Chrysler lenders who called "illegal" the restructuring plan unveiled last Thursday by the iconic US automaker and the government.

Fiat's drive to create a global car giant from the remnants of General Motors in Europe and Chrysler met with fierce resistance on both sides of the Atlantic.

Unions expressed fears that Fiat head Sergio Marchionne would close plants and slash thousands of jobs if what he calls his "marriage made in heaven" to form the world's second-biggest automaker after Toyota becomes reality.

A report in Wednesday's edition of the Germany daily Frankfurter Allgemeine Zeitung (FAZ) appeared to confirm their fears.

Citing a sensitive internal document, it said Fiat would want to cut 18,000 jobs, closing or scaling down 10 factories in Europe if it closed the Opel/GM deal.

Worst hit would be GM's Vauxhall factories in Britain, an Opel factory in Belgium and factories in Italy, said the paper, citing "Project Football," a leaked Fiat document marked "highly confidential" and dated April 3.

Earlier, Marchionne told the German daily Bild that he would not close any factories in Germany, where GM Europe employs about half of its 56,000 European workers at Opel.

But he added: "Opel can never make money in its current size, and if you don't make money you won't survive... The workforce of course has to be reduced. No one can change that."

In Britain, the head of the country's main carworkers' union Unite had already said he feared that Vauxhall -- part of GM Europe, employing over 5,000 workers in Britain -- could be sacrificed if Marchionne got his way.

"Quite frankly this move sends shivers down my spine... These proposals are not so much a sale as a giveaway," Unite joint general secretary Tony Woodley said.

Unions in Italy were also unhappy. Fiat is by far the country's biggest private sector employer, paying the wages of more than 82,000 people including 30,000 in its auto division at five assembly plants.

Fresh from securing a 20-percent stake in the bankrupt Chrysler last week, Marchionne also wanted to snap up GM's European business to create a new giant making between six and seven million vehicles every year.

GM is expected by analysts to follow fellow Detroit "Big Three" behemoth Chrysler into bankruptcy soon and has been trying to offload some of its European operations, based on Opel and Vauxhall, for some time.

Industry sources told AFP on Tuesday that Fiat was also looking at picking up GM's operations in Latin America where the US firm sold 1.2 million vehicles last year.

A spokesman for GM's unit Saab said however that Fiat was not among 10 parties from North America, Europe and Asia seeking to acquire the Swedish firm.

On Monday a smiling Marchionne was in Berlin touting his plans to ministers in the hope that the German government would help the takeover become reality.

But Economy Minister Karl-Theodor zu Guttenberg said that although Fiat's plans were "interesting" he needed more details and that there were other interested parties.

Hendrik Hering, economy minister in the state of Rhineland-Palatinate where Opel employs 3,000 people at an engine factory that might not form part of Marchionne's vision, went further, calling Fiat's scheme "unacceptable."

German Chancellor Angela Merkel's government has reportedly drawn up a 14-point list of criteria that any buyer of GM Europe has to fulfil before Berlin opens its chequebook.

Frank Schwope, auto analyst at NordLB bank, said that Fiat also has its work cut out winning over GM executives in Detroit. "GM, at the most, will allow Fiat to take a minority stake in Opel," he told AFP.

Fiat is also not the only show in town.

The Financial Times reported that as many as six others including sovereign wealth funds from Abu Dhabi and Singapore and three private equity groups were also eyeing GM Europe.

Another possible suitor is Canadian car parts giant Magna, teaming up with Russian automaker GAZ, controlled by billionaire Oleg Deripaska, and Russia's biggest lender Sberbank.

Marchionne also faces a group of disgruntled Chrysler creditors who on Monday launched a bid to block the US firm's "illegal" and "fatally flawed" restructuring.

Under a plan announced on Thursday by US President Barack Obama, Chrysler aims for a "surgical" bankruptcy to wipe out a portion of its debts, allowing the creation of a new firm owned by unions, governments -- and Fiat.

© 2009 AFP

[Polyal]

I cant believe SAAB are still kicking about, they have done nothing for as long as I can remember and that doesn't look like changing. Cant see how they will survive, god Pontiac would have had more brand equity surely.

FIAT are doing well, smart time to buy if you can. Tony is killing it!

[Gobes32]

Fiat look like they will be the GM of the 21st century........

[vztrt]

A twist to the Opel saga

http://news.theage.com.au/breaking-n...0509-ayfb.html

Fiat chiefs raise fresh GM doubts
May 9, 2009 - 12:59PM

Italian carmaker Fiat appeared to raise fresh doubts on Friday about its plans for parts of the German operations of crisis-hit US carmaker General Motors if the group's bid to buy GM's European auto offshoots succeeds.

Following a meeting between Fiat chief Sergio Marchionne and key German political leaders, the premier of the west German state of Rhineland Platz Kurt Beck said he was "greatly concerned" about the operations of GM's German subsidiary, Opel.

Turin-based Fiat wants to build what would be the world's second biggest auto group by taking out holdings in both the troubled US automotive group Chrysler and GM's German and European operations, which also includes Britain's Vauxhall.

But Beck said he now had "more doubts than before" about the prospects for the Opel operations in the city of Kaiserlauten, where 1,100 workers are employed in a motor production unit.

Beck said he had sent a report of his meeting with Marchionne to German Economics Minister Karl-Theodor zu Guttenberg and the leaders of other German states where Opel has operations.

For his part, Marchionne said there was "still much to negotiate" about the Opel site in Kaiserlauten, adding that everything was still open.

Under Fiat's plans for Opel, motor production is to be concentrated at one site.

Following talks with Marchionne, the premier of the German state of Hesse, Roland Koch, where Opel is based, said he had called on Fiat to provide concrete plans for Opel's future.

This is the second time in a week that Marchionne has visited Germany having held talks with Guttenberg on Fiat's plans for Opel on Monday.

In the meantime, however, Opel unions in Kaiserlauten also signalled Friday resistance to Fiat proposals with the chief of the workers' council Alfred Klingel telling the German Press Agency dpa they would not go along with the Italian carmaker's plans.

But the battle for GM's European operations is far from over with the Austrian-Canadian auto-parts supplier Magna International Inc also launching a bid for Opel and media reports saying that Russian automaker OAO GAZ Group is also weighing up a move on the GM German unit.

US President Barak Obama has given GM until the end of the month to present a restructuring plan or face insolvency.

© 2009 AAP

[vztrt]

Some more news.

http://news.theage.com.au/breaking-n...0510-aysa.html

Fiat boss evokes 'difficult decisions' in Opel takeover
May 10, 2009 - 2:19AM

The head of Italian automaker Fiat evoked the spectre of job losses on Saturday as he spoke of "difficult decisions" regarding its proposed takeover of Germany's Opel.

"These are difficult decisions, I understand. But it is the moment to make them," the domestic ANSA news agency quoted Sergio Marchionne as saying when asked about layoffs if a takeover goes through.

"What is important is to be completely honest about the problems and how to face them," he added. "If we lose this chance, we will drag these industrial problems into the future."

The governor of the German Rhineland-Palatinate state, Kurt Beck, voiced concern Friday after meeting with Marchionne that Fiat's takeover of Opel would lead to the closure of the Kaiserslautern engine and parts plant.

Italians unions have expressed similar fears after a report this week claimed Fiat plans to slash 18,000 jobs by closing or scaling down 10 factories in Europe if it takes over Opel -- General Motors' German subsidiary.

But Marchionne, who rescued Fiat from the brink of collapse in a few years without massive job cuts, said the company's commitment to the Mirafiori plant in Turin -- its biggest in Italy -- is "unchangeable".

He also said a Fiat-Opel deal is "a very big European challenge", and that "if we succeed in reaching an agreement with the social partners, we will succeed in finding a big answer for Europe."

German Economy Minister Karl-Theodor zu Guttenberg said in an interview to be published Monday that Berlin was looking for a way to protect Opel if General Motors goes bankrupt.

"It will be about protecting Opel's assets from GM's creditors," he said in Der Spiegel, referring to how Opel can survive GM's restructuring efforts to avoid going bust.

The Economist newsmagazine, citing sources close to Marchionne, reported Friday that if Fiat takes over Opel it would favour slashing production in its factories instead of simply closing them.

Italian unions said Saturday they would meet their German colleagues in Frankfurt on May 13 to discuss the takeover, ANSA said.

Fiat is also set to acquire a major stake in Chrysler once it emerges from bankruptcy protection, meaning it would become one of the world's biggest automotive groups.

Marchionne said that "everything is going as expected with Chrysler" and added that Fiat is exploring other avenues such as GM's Latin American operations.

© 2009 AFP

[vztrt]

GM may keep Opel...but more likely Fiat would take them over.

http://news.theage.com.au/breaking-n...0520-bft5.html

GM Europe expects at least three bids for Opel
Lenaig Bredoux
May 20, 2009 - 11:19PM

Stricken US auto giant General Motors said Wednesday it expected at least three bidders for a stake in its European Opel unit to hand over plans to the German government ahead of a 1600 GMT deadline.

A spokesman for GM Europe stopped short of naming names but Italy's Fiat and Canadian auto parts Magna have confirmed an interest, while US investment fund Ripplewood is also reportedly throwing its hat into the ring.

The final decision on who buys GM Europe, which includes Opel in Germany and Vauxhall in Britain, lies with GM itself and with the US government, but Berlin will sweeten any deal with millions of euros (US dollars) in loan guarantees.

GM is relying on more than 15 billion US dollars in emergency government loans and faces a June 1 deadline to complete a major restructuring plan or be forced to follow fellow former behemoth Chrysler into bankruptcy.

GM's chief executive Fritz Henderson said last week that a bankruptcy filing is the "more probable" outcome "given the objectives that we've set for ourselves."

The most prominent bidder for Opel is Italy's Fiat, which wants to combine GM's European operations with the Chrysler to create the world's second largest carmaker behind Japan's Toyota.

Fiat earlier negotiated a 20-percent stake in bankrupt Chrysler in exchange for its production technology and can increase that to a controlling 51-percent share in the US auto maker as long as Chrysler repays state aid.

Canadian car parts maker Magna has also expressed an interest, teaming up with Russian state-owned lender Sberbank and with Russian carmaker GAZ, owned by tycoon Oleg Deripaska.

Bidders making a formal offer will be expected to come up with around 650 million euros (886 million euros), the FT reported on Wednesday, and that GM will give preference to cash bids.

This could be a blow to Fiat, with a spokesman telling AFP on Tuesday that the firm intended to offer assets instead of cash, in a similar model to its recent deal securing a stake in Chrysler.

Italian daily La Repubblica cited on Wednesday the letter of intent that Fiat is handing over in Berlin as saying the firm will put on the table know-how and its vast sales network.

"We are in crisis but we still have a value," Klaus Franz, the head of Opel's powerful works council told the FT. "Such remarks are bursting with arrogance and disrespect for the employees at Opel."

The fate of Opel, an industrial icon dating back to the 19th century and which directly employs around 25,000 people in Germany, has become a hot-button political issue with barely over four months to go until general elections.

Chancellor Angela Merkel, up for a second term in the September 27 vote, is prepared to pull out all the stops to save Opel from collapse but being seen as writing a blank cheque could also hurt her re-election chances.

The German government has drawn up emergency plans involving a special trustee and so-called bridge financing to keep Opel going in the event of a GM bankruptcy.

[vztrt]

Bit of an update

http://news.theage.com.au/breaking-n...0523-bihp.html

Fiat to cut fewer than 10,000 jobs in Europe
May 23, 2009 - 1:29AM

Fiat will cut fewer than 10,000 jobs in Europe if the Italian auto giant wins its bid to take over General Motors subsidiary Opel in Germany, the group said in a statement Friday.

"The Fiat plan is for total employee reductions -- which would take place gradually and be distributed throughout Europe -- of less than 10,000," it said.

"The impact for the workforce in Germany, therefore, would be significantly lower than speculated," it added.

"For some time, comments have been circulating that, in the event Fiat were to acquire Opel, there would be approximately 18,000 redundancies in Germany," the statement said.

"These comments are entirely unfounded."

Fears of massive, swift job cuts have persisted since early this month German daily Frankfurter Allgemeine Zeitung, purportedly citing a leaked internal document, said Fiat would cut 18,000 jobs and close or scale down 10 factories in Europe if the Opel deal goes through.

Fiat issued a categorical denial of the reprot the next day.

Opel employs 25,000 people directly in Germany, and its future is a major concern for the Berlin government.

Fiat on Wednesday made a formal offer to take over Opel as well as Britain's Vauxhall, two European subsidiaries of General Motors which is on the verge of bankruptcy and being restructured with US government help.

Fiat boss Sergio Marchionne believes the Italian auto giant stands a better than even chance of pulling off its takeover bid for Opel, reports said on Thursday.

The Canadian firm Magna, with support from Russian manufacturer GAZ, and Brussels-based RHJ International, whose main shareholder is the founder of the US investment fund Ripplewood, also submitted offers.

The final decision on Opel, as well as other units of GM Europe including Britain's Vauxhall and Sweden's Saab, lies with General Motors itself and with the US government, but Berlin will sweeten any deal with loan guarantees.

Fiat, which has already sealed a tie-up with Chrysler, wants to combine GM's European, Latin American and South African operations with Chrysler's to create the world's second largest carmaker behind Japan's Toyota.

Fiat earlier negotiated a 20 percent stake in bankrupt Chrysler in exchange for its production technology and can increase that to a controlling 51 percent share in the US auto maker as long as Chrysler repays state aid.

[R-Design]

another update, the deadline is June 1st.

http://www.reuters.com/article/innov...LP686820090526

[vztrt]

The news is coming in.

http://news.theage.com.au/breaking-n...0526-bmbt.html

Fiat chief tries to clinch Opel deal in Berlin
Simon Sturdee
May 26, 2009 - 10:39PM

Fiat chief Sergio Marchionne jetted back to Germany on Tuesday for an eleventh-hour attempt to win over a sceptical Chancellor Angela Merkel to his bid for General Motors' Opel unit.

With indications that Berlin and GM prefer a Russian-backed bid from Canada's Magna International, Marchionne met Merkel and Economy Minister Karl-Theodor zu Guttenberg, reportedly after talks Monday in Detroit with GM.

It was the latest in an intense flurry of meetings as the German government strives to choose its preferred bidder on Wednesday "well before" a possible bankruptcy filing by GM, Merkel's spokesman said on Monday.

The final decision on which of the three bids -- a third is from Brussels-based RHJ, backed by US private equity firm Ripplewood -- for a stake in GM's European operations will win out lies with GM and the US government.

But Germany, where GM has most of its European factories and employees, is prepared to offer billions of euros (US dollars) in loan guarantees to stop Opel's 25,000 German employees losing their jobs four months before elections.

GM, which also owns Vauxhall in Britain and Saab in Sweden, is working against a June 1 deadline to convince the US Treasury with its restructuring efforts to keep it alive with billions of US dollars in taxpayers' money.

If it cannot, the Detroit giant will follow Chrysler into bankruptcy.

Zu Guttenberg over the weekend raised the possibility of letting Opel file for insolvency as well but the government has stressed that this is a last resort and that they would prefer to find an investor.

Merkel will reportedly hold a crunch final meeting on Wednesday running late into the night if necessary that will include representatives from GM and the three bidders, sources told AFP.

Marchionne wants to combine GM's European and Latin American operations with Chrysler, in which it has secured a 20-percent stake, to create the world's second largest automaker.

Canadian auto parts giant Magna is bidding together with Russia's top bank, state-controlled Sberbank.

Russian tycoon Oleg Deripaska's truck company GAZ is also part of the bid, although it will provide industrial capacity rather than cash and plans to produce Opel cars at its Nizhny Novgorod plant, Russian media reported.

Brussels-based RHJ International, the third bidder, owns stakes in auto parts firms including Niles and Asehi in Japan, Belgium's Honsel, as well as Columbia Music Entertainment.

Magna, which already assembles Saab, BMW and Mercedes vehicles under licence and which offered to buy Chrysler from Daimler in 2007, is seen as favourite in Berlin and Detroit but talks are ongoing with all three bidders.

German Chancellor Angela Merkel spoke by phone to Russian Prime Minister Vladimir Putin on Saturday about Magna's offer and on Sunday talked with the firm's owner, Frank Stronach, and chief executive Siegfried Wolf.

Magna and RHJ were due to present on Tuesday their plans to employee representatives at Opel's main Ruesselsheim factory near Frankfurt, Rainer Einenkel, head of the works council from another factory, Bochum, told AFP.

© 2009 AFP

[vztrt]

GM is getting Opel ready for sale

http://news.theage.com.au/breaking-n...0527-bnr0.html

GM consolidates European assets in Opel
May 27, 2009 - 9:54PM

US car giant General Motors has transferred control of its European factories and patents to its German subsidiary Opel, ahead of the latter's sale, an Opel spokesman says.

"GM proposed that and the Opel supervisory board accepted it today," the spokesman told AFP on Wednesday.

The move consolidated all European plants, patents and technologies within a single judicial entity, he added.

They include assets owned by Opel, its British sister company Vauxhall and production sites for motors and car parts, but not assets owned by Swedish brand Saab, another GM unit.

German authorities could reveal on Wednesday their preferred bidder for Opel, with either Canadian car parts group Magna or Italian car maker Fiat seen as most likely to get the nod.

For its part, GM could declare bankruptcy as early as Thursday.

© 2009 AFP

[vztrt]

Talks have collapsed....but a Chinese manufacturer is a chance of buying Opel.

http://news.theage.com.au/breaking-n...0528-boqc.html

Germany blames US after Opel rescue talks collapse
Simon Sturdee
May 28, 2009 - 5:09PM

Talks aimed at saving General Motors Europe's Opel unit broke down amid acrimony between Germany and the United States on Thursday as fears mounted for tens of thousands of jobs across Europe.

The marathon negotiations were aimed at finding a suitable buyer for GM's struggling European operations, with the German government willing to offer billions of euros (US dollars) in loan guarantees to any potential investor.

Two bidders, Italian car giant Fiat and Canadian auto parts maker Magna International remained in the race after a third bidder, Brussels-based investment firm RHJ International pulled out during the talks.

German officials blamed the breakdown on a last-minute request from GM for an extra 300 million euros (415 million US dollars) of funds for Opel, lashing out at General Motors for "scandalous" negotiating tactics.

Speaking to reporters in the early morning, German Finance Minister Peer Steinbrueck said: "We were unpleasantly surprised when this new demand came out of the blue at 8:00pm local time (1800GMT). We found that pretty scandalous."

"GM again confronted us with new figures," said Economy Minister Karl-Theodor zu Guttenberg, adding that the US government "could have made more of an effort" with its choice of representative at the discussions.

"We have made a fresh request to the US Treasury and we expect a response before Friday," he said, calling its input so far "marginal, to put it politely."

Steinbrueck also said that he did not want German government money to go "outside Europe's borders."

A new round of talks is scheduled for Friday as Berlin races against time to find a preferred bidder ahead of GM's likely bankruptcy on June 1. Declaring Opel insolvent is also still an option.

Officials at Wednesday night's talks also discussed putting Opel in a trust to keep it operating with a temporary "bridging loan" from the government worth some 1.5 billion euros.

This model was given a boost on Wednesday by Opel's announcement that GM had transferred to it control of GM's European factories and its patents, allowing the firm still to operate in the event of a bankruptcy of the US giant.

"If GM goes bankrupt, we don't want the lights going out at Opel," Vice-Chancellor Frank-Walter Steinmeier, who is challenging Angela Merkel for the chancellorship in September elections, told reporters late on Wednesday.

Merkel is under pressure from all sides to find a way to break the deadlock, with some 25,000 German jobs at stake just four months before the country goes to the polls.

Berlin also came under fire from other European countries on Wednesday with Britain and Belgium pressing Germany not to strike a deal that would protect German workers at the expense of employees elsewhere.

The European Commission in Brussels called for a meeting of European finance and industry ministers on the issue "as soon as possible."

GM employs 55,000 people Europe-wide, including around 7,000 in Spain, 4,700 in Britain at Vauxhall, 4,000 in Sweden at Saab, 3,600 in Poland, 2,600 in Belgium and 1,800 in Italy.

Of the two bidders left standing, Magna's offer is still seen as the front runner, with unions and centre-left Social Democrat members of the governing coalition backing it.

It has teamed up with Russia's top bank, state-controlled Sberbank, for a bid that would see precious metals tycoon Oleg Deripaska's truck company GAZ making Opel vehicles in Russia.

For its part, Fiat wants to combine General Motors' European and Latin American operations with Chrysler, in which it has secured a 20-percent stake, to create the world's second largest automaker after Toyota of Japan.

Although the final decision on the fate of GM's European operations lies with the company itself and the US government, Germany has a key role to play as it is stumping up a good deal of the cash to keep the factories going.

An eleventh-hour "expression of interest" by a Chinese firm, Beijing Automotive Industry Holding, was still under consideration, but German officials made clear their focus was on Magna and Fiat.

© 2009 AFP

[vztrt]

Not going good for Opel.

http://news.theage.com.au/breaking-n...0528-bowy.html

GM talks with Europe break down in anger
May 28, 2009 - 9:19PM

Talks over the sale of General Motors' European operations acrimoniously collapsed Thursday throwing up a new obstacle to the US auto giant's efforts to avoid bankruptcy.

A New York court was also to hold new hearings Thursday on Chrysler's bankruptcy application to lay on a rescue operation by Fiat of Italy as the world auto industry remained deep in torment.

The German government angrily accused GM of using "scandalous" negotiating tactics during all night talks on the sale of European affiliates Opel and Vauxhall.

Fiat and Canadian auto parts maker Magna International remained in the race for Opel after a third bidder, investment firm RHJ International pulled out. Beijing Automotive Industry Holding of China has also made a late bid.

Germany has offered billions of euros in soft loans to whoever takes over Opel. German officials blamed the talks breakdown on a last-minute request from GM for an extra 300 million euros (415 million US dollars) of funds for Opel.

German Finance Minister Peer Steinbrueck said: "We were unpleasantly surprised when this new demand came out of the blue at 8:00pm local time. We found that pretty scandalous."

Economy Minister Karl-Theodor zu Guttenberg criticised the US government saying it "could have made more of an effort" with its choice of representative at the discussions.

"We have made a fresh request to the US Treasury and we expect a response before Friday," he said, calling its input so far "marginal, to put it politely."

Steinbrueck also said he did not want German government money to go "outside Europe's borders."

A new round of talks is scheduled for Friday as Berlin races against time to find a saviour for Opel ahead of GM's likely bankruptcy on June 1. Declaring Opel insolvent is also still an option.

Officials at Wednesday night's talks also discussed putting Opel in a trust to keep it operating with a temporary "bridging loan" from the government worth some 1.5 billion euros.

This model was given a boost on Wednesday by Opel's announcement that GM had transferred control of GM's European factories and patents to Opel, allowing the firm still to operate in the event of bankruptcy.

But while Germany is fighting for 25,000 Opel jobs at stake, it also faces pressure from Britain and Belgium not to make a deal that protects German workers at the expense of factories in other countries.

GM employs 55,000 people Europe-wide, including around 7,000 in Spain, 4,700 in Britain at Vauxhall, 4,000 in Sweden at Saab, 3,600 in Poland, 2,600 in Belgium and 1,800 in Italy.

GM faces a June 1 deadline to give the US government a viable rescheduling plan, which includes the future of Opel, Vauxhall and Saab, in return for government funding.

Bankruptcy loomed larger after holders of 27 billion US dollars of GM bonds this week rejected a plan to swap a large portion of the debt for equity in the firm.

Chrysler faces its own battle as it faces an army of objectors to its rescue plan in a New York court.

Judge Arthur Gonzalez, at the US Bankruptcy Court in New York, was widely expected to overrule hundreds of objections to the Chrysler rescue plan and approve the bankruptcy.

However, after 10 hours of arguments on Wednesday, Gonzalez said there were more witnesses to be heard Thursday and possibly even Friday before he could rule.

If Gonzalez approves the bankruptcy, a new-look Chrysler could emerge within days, according to President Barack Obama's administration, which is spearheading the plan and providing emergency funding.

If not, Chrysler faces an uncertain future, with a worst-case scenario being Fiat abandoning the tie-up and the US automaker going into liquidation.

Opponents to the sale of Chrysler to a group led by Fiat include creditors and many of the US car dealerships who face closure.

Glenn Kurtz, an attorney for pension funds opposing the sale, argued Wednesday that the Chrysler bankruptcy plan was "tantamount to placing the ice cube in the sun and saying we have got to sell it quickly before it melts."

But Gonzalez ruled out allowing any new legal delays.

© 2009 AFP

[vztrt]

More problems with the talks.

http://news.theage.com.au/breaking-n...0529-bq3w.html

Fiat says can't offer more for Opel, shuns talks
May 29, 2009 - 6:14PM

Italian auto giant Fiat said it could not improve its offer to buy Germany's Opel against a rival bid by Canada's Magna International and would not attend key talks in Berlin on the takeover.

"We have already offered to contribute our auto business assets to the merger on a debt-free basis and thus provide substantial, and absolutely necessary, equity to the merger," Fiat boss Sergio Marchionne said in a statement, adding: "More cannot be asked."

Fiat negotiators will therefore not attend the meeting with the German government in Berlin on Friday because its "sole topic" will be emergency funding for Opel, a subsidiary of near-bankrupt US automaker General Motors, the statement said.

"It is in fact unreasonable to expect, on the basis of prudent business judgment and proper governance of its affairs, that Fiat would provide funds to an organisation whose financial details and position remain unknown to date," the statement said.

The Italian group "remains open and committed to continue discussions with all parties involved with a view to find a stable and lasting solution for the industrial activities of Opel," it said.

German officials were to hold further talks Friday to try to clinch a rescue deal for Opel ahead of an expected bankruptcy filing by GM, even after talks with Washington broke down in acrimony.

Chancellor Angela Merkel was expected to hold further negotiations in the afternoon with the US government, GM and Magna.

German officials remained confident of reaching a deal aimed at finding a suitable buyer for Opel and a financing structure for temporary loans from the German government, stalling when the US side suddenly upped their demand for loans by 300 million euros (416 million US dollars).

Opel's powerful works council described the breakdown in talks as a "bitter setback" and accused GM of treating Opel as a "chip in the poker game of their own insolvency."

© 2009 AFP

[vztrt]

Some more news.

http://news.theage.com.au/breaking-n...0529-bq3w.html

German, US officials push for Opel breakthrough
Simon Sturdee
May 29, 2009 - 6:54PM

German and US officials were to launch a fresh push on Friday to clinch a rescue deal for General Motors' European units Opel and Vauxhall as Italy's Fiat refused to improve on its offer to buy a stake.

Marathon talks that lasted all night earlier this week ended in acrimony after Germany said the US side arrived with an 11th-hour request for 300 million euros (416 million US dollars) more in loans from the German government.

Finance Minister Peer Steinbrueck slammed the US negotiating tactics as "scandalous" and Economy Minister Karl-Theodor zu Guttenberg said the talks were "at times absurd."

Opel's powerful works council described the breakdown in talks as a "bitter setback" and accused GM of treating Opel as a "chip in the poker game of their own insolvency."

The United States rebuffed the charges. "We believe it was a constructive dialogue," a US government official told reporters by telephone in Washington, speaking on condition of anonymity.

"We would strongly resist the notion that the US government was either uninterested... or trying to make any last-minute math. None of that is true."

The negotiators are racing against a June 1 deadline set by US President Barack Obama's administration for General Motors to come up with a rescue plan or be forced to follow rival Chrysler into bankruptcy.

In a key development on Wednesday, GM transferred assets and patents to Opel in a bid to keep them safe in the event of a GM bankruptcy.

And in a dramatic move on Thursday, a proposed bankruptcy reorganisation plan was unveiled, which would give the US government a 72.5 percent stake in GM, a regulatory filing showed.

Friday's talks in Berlin were set to choose between two bids to acquire a stake in GM's European operations, which include Opel in Germany and Vauxhall in Britain.

They were also about creating a trusteeship model that would keep Opel operating in the event of a GM bankruptcy with the help of a 1.5-billion-euro government loan.

After an offer from Brussels-based RHJ International was shunned late Wednesday, the race became a contest between Italy's Fiat and Canadian auto parts maker Magna International, which is backed by Russian interests.

But on Friday Fiat said it could not improve its offer and would not attend the talks.

"We have already offered to contribute our auto business assets to the merger on a debt-free basis and thus provide substantial, and absolutely necessary, equity to the merger," Fiat boss Sergio Marchionne said in a statement, adding: "More cannot be asked."

Fiat negotiators will therefore not attend the meeting because its "sole topic" will be emergency funding for Opel.

"It is in fact unreasonable to expect, on the basis of prudent business judgment and proper governance of its affairs, that Fiat would provide funds to an organisation whose financial details and position remain unknown to date," the statement said.

Chancellor Angela Merkel is under pressure from all sides to find a way to break the deadlock, with some 25,000 German jobs at stake just four months before a national election.

GM employs 55,000 people Europe-wide, including around 7,000 in Spain, 4,700 in Britain at Vauxhall, 4,000 in Sweden at Saab, 3,600 in Poland, 2,600 in Belgium and 1,800 in Italy.

Although the final decision on the fate of GM's European operations lies with Detroit and Washington, Germany has a key role to play as it will provide billions of euros in loan guarantees to a suitable bidder.

© 2009 AFP

[R-Design]

No matter what happens Opel will be in better hands after the sale.

I can't believe GM's actions when so many jobs are at stake, one last kick in the guts on their way out.

[Sprint XR8]

Magna 'agrees to buy GM Europe'

Canadian-Austrian car parts maker Magna International has reached an agreement in principle to rescue GM Europe, owner of Opel and Vauxhall, reports say.

The agreement was reached with General Motors, but will need to be approved by the German government, which will be providing funding to the new owner.

The other potential bidder, Fiat, said it would not be attending Friday's talks with the German government.

GM in the US is expected to declare Chapter 11 bankruptcy on Monday.

There is due to be a meeting in Berlin at 1800 local time (1600 GMT) attended by Chancellor Angela Merkel, the ministers involved and officials from the German states that contain GM plants to discuss whether to approve the deal.

Extra funding

Magna and GM will not be attending the meeting at first, although they may be invited later.

There have been suggestions in the German media that it may be cheaper for the German government to allow GM Europe to declare itself insolvent than to allow it to be bought.

On Thursday, the German government criticised the US Treasury and General Motors after being told at the last minute that GM Europe would need another 300m euros ($415m; £260m) in short-term funding.

It has already offered almost 1.4bn euros in loan guarantees.

Magna and GM will also have to make sure that GM Europe is restructured in a way that will protect the carmaker if, as expected, its parent company in the US declares itself bankrupt.
http://news.bbc.co.uk/2/hi/business/8074218.stm

[Sprint XR8]

Germany Selects Magna As Partner For Opel

BERLIN -(Dow Jones)- The German government early Saturday said it selected Austrian-Canadian car parts maker Magna International Inc. (MGA) as a partner for General Motors Corp.'s (GM) German Adam Opel GmbH unit, ahead of a likely bankruptcy filing of Opel's parent GM in the U.S.

Speaking after hours of intense negotiations, German Finance Minister Peer Steinbrueck told reporters the German government is well aware of the risks posed by the deal, but nevertheless defended the rescue of the troubled German carmaker as justified.

Germany will provide EUR1.5 billion in bridge financing for Opel, paving the way for a takeover by Magna and its two Russian partners.

Magna has teamed up with Russian auto maker OAO GAZ Group (GAZA.RS) and state- controlled OAO Sberbank (SBER.RS) in its bid for Opel.

Steinbrueck said the EUR1.5 billion bridge financing, which it intended to keep Opel afloat until the details of a takeover by Magna are decided, is the upper limit the German government is willing to provide.

Steinbrueck said the parties involved also agreed on the model of a trusteeship for Opel for the interim period.

Speaking after the marathon talks that started Friday afternoon in Berlin, Magna co-Chief Executive Siegfried Wolf said he expects the deal with General Motors to be signed in five weeks.

Wolf confirmed that Magna will provide the short-term cash demand of EUR300 million to Opel, which was one of the key reasons for the German government to delay the decision on state aid earlier this week. He said the funds would be available Tuesday.

Because of the agreement on the trusteeship and the bridge finance provided by Germany, Wolf said he sees no risk for Opel coming from an eventual GM insolvency.

Wolf said plans for the future shareholder structure of Opel haven't changed, but noted that "some adjustments" might have to be made following the agreement after consulting with its Russian partners.

"Our Russian partners have been very supportive in this deal," Wolf said, adding that Opel stands to "benefit from the significant growth potential of the Russian auto market".

According to previous statements, Magna's consortium plans an initial investment around EUR700 million. Under the plan, which is backed by Opel's works council, GM would retain a 35% stake in the company. Sberbank would take a 35% stake as well, with Magna holding 20% and Opel's employees with 10%.
http://money.cnn.com/news/newsfeeds/...5_FORTUNE5.htm

[vztrt]

Some news on the sale

http://www.fordforums.com.au/showthr...03#post2687203

Opel rescue raises hopes
Richard Carter
May 31, 2009 - 1:44AM

German auto-workers expressed relief Saturday after a dramatic deal to save iconic car maker Opel, but Chancellor Angela Merkel warned of a bumpy ride ahead with the industry in turmoil worldwide.

The deal, struck in the early hours of Saturday morning after marathon talks, sees Canadian parts maker Magna and its Russian backers taking over Opel as its parent company General Motors prepares to file for insolvency.

But while Germany's 25,000 Opel workers cheered the deal, Merkel -- who faces a general election in four months -- underlined the scale of the challenge facing the reborn company and its employees.

"For Opel and Magna, the work is now just beginning and there are several difficulties still to overcome," she told reporters.

Government sources said Magna was likely to slash around 2,500 jobs at its four plants around Germany, but stressed that all four factories would stay open, a pledge repeated by Magna bosses after the talks.

Nevertheless, General Motors employs some 50,000 people throughout Europe and Magna plans to cut about a fifth.

In total, GM employs around 7,000 in Spain, 4,700 in Britain at Vauxhall, 3,600 in Poland, 2,600 in Belgium and 1,800 in Italy.

The head of Opel's powerful works committee, Klaus Franz, was also cautious.

"I am very happy that we have managed to save Opel and that the company will not be dragged down by the insolvency of GM," Franz told AFP.

"But difficult times are still ahead of us ... Germany is not a land of milk of honey, that means there will be job losses."

"The most important thing is that the social dimension is being taken into account and that there will be no factory closures," he added.

Belgian union official Rudi Kennes, of the socialist FGTB union at Opel's Antwerp plant, gave a cautious welcome Saturday to the deal, telling the Belga news agency there would be talks with the new owners in the coming weeks.

Derek Simpson, joint leader of Unite, Britain's biggest trade union, expressed concern for the future of the two British plants.

But while the officials from Magna had struck him as "very professional", he still expected "long and tough negotiations", he told Belgian television.

"That's where I think the (British) government has to be more proactive and recognise that it has to some extent been watching in the stands while the action has been taking place on the pitch."

Britain's Business Secretary Peter Mandelson said Friday he was seeking an early meeting with Magna to build on their previous commitment to keeping production at Britain's Vauxhall plants.

In Canada meanwhile, Magna boss Frank Stronach told the Globe and Mail newspaper he wanted Opel cars to be built in Canada.

Analysts also warned against euphoria, given the still parlous state of the global car industry.

"All this seems to rest on a very fragile base. Let's say there is a 60- or 70-percent chance that it won't work," said Juergen Pieper, an automotive expert at Metzler bank.

Frank Schwope, from NordLB bank said the Canadian-Russian investors "will try everything, and then fail and Opel will be insolvent in two or three years."

He doubted that Magna, a rags-to-riches car parts maker with little experience of manufacturing cars, was the right fit for Opel.

The deal, backed by Russia's state-controlled Sberbank, will see Russian automaker GAZ making Opel vehicles in Russia, as well as maintaining Opel and Vauxhall production elsewhere in Europe.

Germany played a major role as it agreed to stump up billions of euros (US dollars) in loan guarantees and emergency loans to keep the ailing company afloat.

Government sources confirmed on Saturday that Berlin would give loan guarantees of 4.5 billion euros, including 1.5 billion euros in short-term loans to tide Opel over.

Magna has pledged to cough up 300 million euros for Opel's immediate financial needs.

Merkel acknowledged that talks over the future of GM Europe had sometimes been difficult. Germany's Finance Minister Peer Steinbrueck denounced what he said were "scandalous" US negotiating tactics.

A more conciliatory Merkel on Saturday said a telephone call to President Barack Obama had helped seal the deal. But she lashed out at what she said had been "huge mismanagement" by GM executives.

© 2009 AFP

[vztrt]

Go Auto Article.

http://www.goauto.com.au/mellor/mell...2575C7008039FF

GM retains foothold in GM Europe as parts-maker and Russia take control

By IAN PORTER 1 June 2009

THE German government and General Motors have steered Opel and Vauxhall away from Fiat’s clutches in a deal giving Canadian-based automotive supplier Magna and Russian state-owned bank Sberbank a combined stake of 55 per cent in GM Europe.

Crucially, GM has retained 35 per cent, which will likely allow a continuation of technology and platform sharing. This will be an important support for GM’s other small-car operation, Daewoo, which will be supplying much of GM’s needs in the US small-car market.

Potentially, this is good news for Australia's GM Holden, whose small-car range - including the newly released Cruze and a planned locally-made small car to go into production next year - are based on European-designed platforms.

Ten per cent of the new-loook GM Europe will be held by Opel’s 50,000 workers across Europe.

Sberbank will also bring an association with the GAZ group, a large industrial company that builds commercial vehicles in Russia and which will partner Magna and Opel in the Russian market.

The deal was struck at 2am Friday as the German government and four states governments hurried the discussions so that the Opel deal could be done before a June 1 deadline, which is likely to see GM apply for a Chapter 11 bankruptcy.

The German deal will cocoon Opel against any problems caused by the probable bankruptcy of GM today. All parties have agreed to appoint a trustee to take charge of Opel and all its operations in the short term, while the final details of the Magna deal are ironed out.

Under the deal, the German Government will advance €1.5 billion ($A2.65 billion) in bridging loans to keep Opel solvent while all parties finalise the deal.

Apart from the companies involved, four German state parliaments also need to approve the deal, although their chief ministers all supported the deal after the meeting, as did representatives of the US treasury.

The co-chief executive of Magna, Siegfried Wolf, said it could take as long as five weeks to complete the negotiations.

It appears GM preferred the Magna deal because it is based heavily on making a strong push into the emerging Russian market, which has the best prospects of any European market.

Magna plans for Opel and GM to gain 20 per cent of the Russian market in the short term, before expanding this to one million units including light commercial vehicles such as the Opel Combo.

GM Europe head Carl-Peter Forster told reporters: "I think this is the start of a new future for Opel, for the workers, the company and the brand.”

He added, however, there would still be some hard negotiations on the fine-print ahead.

Magna has 70,000 employees in 25 countries, supplies components and systems to many of the world's leading car-makers, including fuel tanks and radiator grilles for the Mercedes-Benz C-Class and fuel filters for the BMW X3.

Based in Ruesselsheim, near Frankfurt, Opel employs 25,000 staff in four German plants.

It is part of a GM Europe operation that employs more than 50,000, with car manufacturing plants in Spain, Poland, Belgium and Britain, where Opel cars are sold under the Vauxhall brand, as well as engine and parts sites such as Aspern, near Vienna.

German unions are happy about Magna beating Fiat to the prize as they feared as many as 18,000 workers might be shown the door under Sergio Marchionne’s plan to combine Fiat and Opel.

The Magna plan requires about 10,000 people to leave Opel, but all four German assembly plants will remain. A plant in Belgium and the two Vauxhall plants in the UK, Luton and Ellesmere Port, which employ 5000 people, look to be in the most danger.

British unions have asked the UK government to do more to safeguard jobs at the Vauxhall plants, but there seems little can be done.

“The Germans have been central to this. We appear to have been on the sidelines," said Derek Simpson, joint general secretary of the Unite union, which represents UK car industry workers.

"With the German plants literally guaranteed security, thanks presumably to the German government's involvement and the billions of euros that they seem to be putting up, that causes a worry for everyone else."

Business secretary Lord Mandelson said he would seek swift confirmation from the Canadian firm that none of the Vauxhall jobs in Britain would be lost.

But union leaders criticised Lord Mandelson for not being more involved in the negotiations, which took place in Germany and were led by German Chancellor Angela Merkel.

Meanwhile, a court in Stockholm, Sweden on Friday granted GM's loss-making unit Saab a further extension to its protection from creditors as a local newspaper named carmaker Koenigsegg, the Renco Group and Fiat SpA as potential buyers for the brands.

Court protection was extended until August 20, allowing Saab to line up a new owner and restructure its business.

[vztrt]

Russian Bank could sell their 35% stake.

http://news.theage.com.au/breaking-n...0605-bxdz.html

Sberbank 'could sell Opel stake to Russian investor'
June 5, 2009 - 1:19AM

The head of Russia's Sberbank said on Thursday the bank did not intend to hold on to a 35-percent stake in European car maker Opel long-term and could sell it on to a Russian investor.

German Gref said the aim of the state bank participating in Opel's rescue was to help Russia's car industry and economy, which already faced declining demand for its low-tech cars even before the economic crisis hit.

"Sberbank does not intend to become a strategic partner of Opel," Gref said at an economic forum in Saint Petersburg.

Asked if Sberbank would later sell its stake, Gref said: "Of course, later."

On television later he added that the eventual recipient could be a "Russian investor," although he did not specify.

"The essential purpose of this purchase is to help in the restructuring of Russian assets.

"This union will be advantageous both for Russia and Germany. We will come out of this with minimal job losses," Gref said.

Gref, an influential former economy minister, particularly praised the Canadian auto parts company leading the rescue of Opel, Magna International, saying the company "knows the Russian market well."

Under a deal agreed last weekend to rescue the German-based arm of America's General Motors, Sberbank is to acquire 35 percent of Opel.

It has joined forces in the deal with troubled Russian car maker GAZ, owned by oligarch Oleg Deripaska.

Magna has already made major investments in the Russian company's plant in the provincial city of Nizhny Novgorod.

On Monday GAZ said it would be ready to start making Opel vehicles within six to nine months if such a decision was taken by the Opel rescue consortium.

Russian Prime Minister Vladimir Putin has made a priority of reviving Russia's ailing car industry, associated in the public mind with low-tech Soviet-era cars such as GAZ's Volga.

On Monday Putin told executives: "The Russian government has its strategy of developing the car industry and the deal we are discussing must be embedded within the strategy for automobile manufacturing."

© 2009 AFP

[schnoods]

The Saga continues.

The way things a looking we could see the all new FIAT Bambino SRT4 with the option of a the LS0.5

I reckon FIAT are looking to buy, but i dont think they will buy into much more than Chrysler, the rest is speculation purely in interest of shareholders.

[Luke Plaizier]

Even the Fiat-Chrysler deal has now hit a snag, potentially delaying their 'quick bankruptcy' plans:

http://www.drive.com.au/Editorial/Ar...ID=63453&vf=12


Lukeyson

[vztrt]

Target sale date set.

http://www.caradvice.com.au/33031/gm...l-sale-report/

GM/Magna set target for Opel sale:report

General Motors and Magna International have set themselves a target of agreeing to the sale of a majority stake in GM loss-making European operations by July 15 sources close to the Canadian auto parts group and its Russian partner Sberbank, have told Reuters newsagency.

“There was an agreement that Magna and GM on July 15 should be far enough in their negotiations that they can reach a conclusion that serves as the basis for a contract,” a person familiar with the matter told Reuters.

Neither Magna nor GM Europe would comment on the time plan.

Siegfried Wolf, co-CEO of Magna, said on June 3 that he expected a “final signing” in four to five weeks, after which it would await the necessary regulatory approvals before an expected closing by the end of September.

Two days later, GM Europe President Carl-Peter Forster confirmed the Magna co-CEO’s rough time plan of a “definitive agreement” by July and a closing by September.

During the time that General Motors operates under Chapter 11 bankruptcy protection and until a sale to a new investor is concluded, 65 per cent of Opel’s shares are formally held by a trust set up to ensure that a 1.5 billion euro (US$2.08 billion) bridge loan extended by Germany is not misappropriated.

Rival bidders waiting in the wings such as Fiat S.p.A. and Beijing Automotive Industry Corporation (BAIC) are still hoping for a collapse in the talks in order to re-enter negotiations with GM.

A source familiar with the bidding process said on Tuesday that BAIC received approval to advance one stage further, gaining access to financial information over Opel that Fiat and Magna previously had.

BAIC had already named PricewaterhouseCoopers as financial advisers earlier this month.

GM and Magna have already largely resolved issues such as the licensing fees Opel will pay for access to GM technology.

Other sticking points, such as where Opel is allowed to sell cars or who ultimately bears the risk for its 4 billion euros in pensions should Opel file for insolvency, have yet to be resolved.

[vztrt]

Opel Future to be decided soon.

http://www.caradvice.com.au/34312/op...-decided-soon/

Opel/Vauxhall future decided soon

While General Motors thrashes out the intricacies of its future in a US bankruptcy court, across in Europe the future of its loss-making Opel/Vauxhall subsidiary also hangs in the balance.

It seems increasingly likely that a majority chunk of GM Europe will end up in the hands of Canadian car parts maker Magna International and its Russian banking partners.

However, GM continues to have a dalliance with other contenders, including Italy’s Fiat and the Chinese carmaker Beijing Automotive.

Reuters Newsagency quotes sources close to the Magna deal as saying the company’s board of directors is scheduled to approve on Tuesday a business plan for the acquisition of GM Europe.

The Canadian car parts supplier and Opel parent General Motors have already clarified most of the major issues in weeks of tough negotiations and they expect to resolve the last few issues holding up the takeover by July 7, the sources said.

At the same time reports say Beijing Automotive Industry Holding Corporation (BAIC) will unveil an improved non binding offer for Opel/Vauxhall.

The German newspaper cited sources close to BAIC for its story. BAIC declined to comment earlier on reports it was going to submit a bid in the coming days.

Meanwhile Reuters says the Magna business plan would serve as the basis for talks with lenders such as Commerzbank, which would finance the takeover, helped by an estimated 3 billion euros (US$4.23 billion) in European state loan guarantees.

Many of the major points still open were clarified at a meeting on June 25 between GM CEO Fritz Henderson, lead GM negotiator John Smith, Magna Co-CEO Siegfried Wolf and Magna Chief Operating Officer Herbert Demel, one source said.

“They came significantly closer to one another in the key points,” the source said.

Talks between GM and Magna have been slowed by disagreements over the use of GM’s technology and engineering designs, rights to Chevrolet in Russia and GM’s attempt to insert a buy back clause into the deal, media reports say.

“The only remaining issue is whether ‘New Opel’ gets the sales distribution rights to GM’s Chevrolet brand for the Russian market, but a solution should be achievable here,” another person close to the talks said.

Magna is the front-runner to take a majority stake in Opel/Vauxhall with a consortium including Russian state bank Sberbank and Russian carmaker GAZ.

Throughout the negotiations GM has said it continues to talk to other potential buyers for GM Europe, including Belgium-based holding company RHJ International and Beijing Automotive.

Once the financing is lined up, Magna and GM would draft a contract that could be signed by July 15.

Majority control over Opel, which also includes plants in Spain and Vauxhall factories in England, is being sold as a precondition to state aid for the German carmaker now that bankrupt GM can no longer afford to finance its foreign subsidiary.