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Opel Gets Loans While Gov't Reviews Bids

German officials on Tuesday said Opel will receive bridge loans to keep it running while government weighs investors' bids for General Motors' embattled European unit.

BERLIN (AP) -- German officials on Tuesday said Opel will receive bridge loans to keep it running while the government weighs investors' bids for General Motors Corp.'s embattled European unit.

Ulrich Wilhelm, a spokesman for Chancellor Angela Merkel, said bank executives and leaders from states home to Opel factories met Tuesday in Berlin to discuss the structure of the financing.

"This discussion was about the clarification of questions related to the bridge financing," Wilhelm said. "Good progress was made, further steps will be taken."

Regional authorities and bank officials, speaking on condition of anonymity because the plan had not been finalized, confirmed that the financing would be a partnership between federal and state governments as well as state-controlled banks.

Opel has said it will need euro1 billion ($1.4 billion) in fresh capital over the next month.

Bids to invest in or acquire Opel are due to the German government on Wednesday.

Fiat CEO Sergio Marchionne met Opel union leaders in Frankfurt Tuesday to discuss the Italian carmaker's plan.

Berthold Huber, chief of the IG-Metall union that represents many Opel workers, said his meeting with Marchionne was positive, if not definitive.

"I don't expect the big pitch in a first conversation," Huber said.

Fiat SpA wants to wrap GM Europe, which includes Opel, into a global car-making powerhouse along with Chrysler LLC.

Canadian auto parts maker Magna International has also said it is considering a stake in Opel, as has the association representing Opel dealers in Europe. Last Friday the European Opel Dealer Association endorsed a plan to seek a minority stake of up to 20 percent by investing euro500 million ($680 million).

Magna did not comment.

Germany's Bild newspaper reported that Ripplewood, a U.S. investment firm, was also preparing a bid.

A spokeswoman for the Economy Ministry did not respond to requests for comment on Ripplewood's interest.

Two Russian companies, carmaker GAZ Group and state lender Sberbank, have also reportedly been considering bids. Both companies declined to comment Tuesday.

Huber said after an 1½-hour meeting with Marchionne that any investor must protect Opel's capital and liquidity. He said his union is concerned about corporate culture differences between Italy's Fiat and the German-based car maker, and about overlap in their products and plants.

Ferdinand Dudenhoeffer, the director of the Center for Automotive Research in Gelsenkirchen, said those redundancies and related fears of overcapacity make Magna a better partner for Opel.

"With Magna, Opel can expand in Europe however it likes, without any of its own company's interests working against it," Dudenhoeffer said.

Preserving jobs, Huber said, is an imperative. Marchionne has said that he does not intend to close any of Opel's four plans in Germany.

With national elections in September, lawmakers from both parties that share a "grand coalition" government are keen to preserve a company that employs some 25,000 people in Germany, nearly half GM Europe's total work force.

Willi Diez, director of the Institute for Automobile Economics in Geislingen, said Opel would be lucky to capitalize on that political momentum and secure its future soon.

"Time is working against Opel," Diez said. "After the election, Opel won't have the same political support that they have today."

Merkel has ruled out direct state aid for Opel, but the government has said it would put the car maker into trusteeship if GM files for bankruptcy and no investor has yet secured the European unit. Discussing that scenario on Friday, Economy Minister Karl-Theodor zu Guttenberg said Opel could also file for bankruptcy.

Deputy economy minister Hartmut Schauerte said Tuesday in Berlin that Opel may not technically meet the requirements for aid from existing bailout funds. He added, however, that Opel could receive government credit anyway because lawmakers from both parties have pledged to preserve the carmaker.

"Eventually it will be a political decision," Schauerte said.

Merkel is scheduled to discuss plans for Opel Wednesday with top officials including her economy and finance ministers and her challenger in September's elections, vice chancellor Frank-Walter Steinmeier.

The Economy Ministry said Monday that a negotiating team may travel to Washington later this week to help Opel's case after reviewing the investors' bids.

Associated Press Writer Guido Rijkhoek reported from Frankfurt.