Fiat Chief Discusses Opel Bid With Germany

BERLIN (AP) -- Fiat CEO Sergio Marchionne pushed his bid for General Motors Corp.'s Opel unit in talks Tuesday with German leaders, saying he had lowered his request for government financial help.

Fiat's rivals in the race for Opel, Canadian auto parts maker Magna International Inc. and U.S. investment firm Ripplewood Holdings LLC, took their case to Opel's employee council, whose head said Magna was in "pole position."

Tuesday's events came ahead of a meeting planned for Wednesday at Chancellor Angela Merkel's office in Berlin, at which Merkel hopes to bring together German and U.S. officials with GM representatives and Opel's potential suitors as pressure builds for a decision on its future.

Marchionne met with conservative Merkel for an hour Tuesday and later made his case to Foreign Minister Frank-Walter Steinmeier, her Social Democratic rival in German elections Sept. 27, who has spoken approvingly of the bid Magna has filed along with Russian lender Sberbank.

U.S. parent GM faces a June 1 deadline to restructure or file for bankruptcy. Germany has pledged bridge financing to keep Opel running; it likely will have to support a new owner with loan guarantees, and has supported an ownership structure separate from GM to ensure that taxpayers' money does not get drawn into U.S. bankruptcy proceedings.

Marchionne told reporters after meeting Steinmeier that "we changed the request for state guarantees (from European governments) from 7 billion to 6 billion" euros, or $9.8 billion to $8.4 billion, but otherwise presented no further changes.

Asked whether he was confident of his bid succeeding, he replied: "I'm not sure it's a question of confidence."

"We're updating people on where we are," he said. "I'm going to be here tomorrow; we'll see what happens."

Economy Minister Karl-Theodor zu Guttenberg said after the meeting that he had a "serious impression" of Fiat's offer. However, he added that all bidders are still in the running and still need improvements.

"We must keep all options on the table," including a possible Opel bankruptcy filing, Guttenberg said. For his part, Marchionne that "we have not thought through what would happen in an insolvency scenario."

Guttenberg later said that, in addition, "interest has been signaled from China." He did not elaborate, saying that "we don't know more at the moment."

The German daily Die Welt reported, without citing sources, that the interest came from car maker Beijing Automotive Industry Holding Corp., and that its plans foresee no job cuts in Germany.

With many German politicians indicating a preference for Magna, Marchionne has sought to allay fears that Fiat's offer — which foresees wrapping Opel into a combined company with Chrysler LLC -- would mean drastic job cuts.

On Sunday, Marchionne was quoted as telling the Bild am Sonntag newspaper that "in the worst case, a maximum of 2,000 jobs in Germany would be affected" by the planned integration.

Opel employs some 25,000 people in Germany, nearly half of GM Europe's total work force. With elections looming in September, Berlin is keen to save as many jobs as it can.

After meeting with the two other bidders at Adam Opel GmbH's Ruesselsheim headquarters, employee council chief Klaus Franz said that "Magna is clearly in pole position."

He said Ripplewood, few details of whose plans have emerged, has "an interesting plan that could be expanded, which has its attractions but also dangers."

Franz said both plans would involve a total of up to 10,000 job cuts. Fiat has said its plan calls for fewer than 10,000 job cuts across Europe.

Klaus said Fiat was invited to present its bid on Tuesday but did not come, which he described as unacceptable.

Merkel has said that decisions will have to be made by midweek, though the choice of an investor ultimately falls to GM and the U.S. administration. Germany would decide on whether to provide assistance, and if so what kind.

A government spokesman said Merkel would host a meeting Wednesday evening that would include Cabinet ministers; governors of the four German states that have Opel plants; top officials from Fiat, Magna and possibly Ripplewood; and representatives from GM, GM Europe and the U.S. Treasury Department.

The spokesman spoke on condition of anonymity because the details had not been announced publicly.

Associated Press writer Rachel Nolan contributed to this report.

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