Create a free Manufacturing.net account to continue

GM Pools Opel-Vauxhall Assets Ahead Of Sale

Automaker moved to package together assets of its Opel and Vauxhall brands for possible new ownership ahead of top-level meetings with bidders and government officials.

BERLIN (AP) -- General Motors Corp. moved Wednesday to package the assets of its European Opel and Vauxhall car brands for possible new ownership before top-level meetings with bidders and government officials in Berlin.

Opel's supervisory board approved a GM Europe plan to pool its European plants, sales operations, patents and other assets, excluding Sweden's Saab unit, debt-free under German-based Adam Opel GmbH, said Karin Kirchner, a spokeswoman for GM Europe.

"This way it can join a partnership with a potential investor," Kirchner said. "You have one company that would be invested in or would sell a stake."

Italy's Fiat SpA, Canadian auto parts maker Magna International Inc. and U.S. investment firm Ripplewood Holdings LLC have all filed bids for Opel.

Kirchner said the consolidation also would help keep Opel's assets separate from a bankruptcy filing by GM, a move that seemed inevitable Wednesday after bondholders balked at its plan to swap bond debt for company stock.

GM faces a Monday deadline to restructure or file for bankruptcy.

"Legally it would ring-fence and isolate the assets from any potential developments," Kirchner said.

The German government has proposed putting Opel under a trustee to allow time for talks to continue with investors. Kirchner said Germany and GM would have equal rights to Opel under that plan.

"The pooling of assets is the first step. Then you can expect that a substantial part of these assets will go into a trustee structure," she said.

Kirchner added that the structure of the trusteeship would be discussed Wednesday night at a meeting planned by Chancellor Angela Merkel to bring together German and U.S. officials with GM representatives and Opel's potential suitors.

German officials are scrutinizing the bids in hope of saving as many jobs as they can, though they say it remains up to GM to choose who will take over Opel.

"It is rather unlikely that the result of tonight will be that future negotiations will be conducted with one investor alone," government spokesman Thomas Steg told reporters before the meeting. He added that it was unclear whether a "ranking" of suitors would emerge.

Germany would decide on whether a new owner would get further government assistance, and if so what kind.

"These negotiations will focus especially on minimizing the risks carried by German taxpayers if we extend bridge financing or further guarantees," Economy Minister Karl-Theodor zu Guttenberg said before the meeting. He went on to say that Germany needed to reach an agreement with U.S. government officials and GM about how Opel might be transferred to a new owner or investor.

"We absolutely need this agreement with the U.S. side," Guttenberg said, adding that insolvency was still possible for Opel if all other options failed.

Some 25,000 people work for Opel in Germany, nearly half of GM Europe's total work force, and national elections in September are putting pressure on politicians to find a solution that avoids as many layoffs as possible.

Sister brand Vauxhall has almost 5,000 employees at two plants in Britain. The Financial Times reported that British Business Secretary Peter Mandelson had spoken to GM executives in Detroit and Europe about preserving Vauxhall.

EU Commission President Jose Manuel Barroso said Belgian Prime Minister Herman Van Rompuy had written to him to ask the EU executive to help coordinate rescue efforts by European governments for General Motors' plants in all of Europe.

"It's not just a German problem, it's a European problem," Barroso told reporters.

Belgium's Flemish regional government is eager to save Opel's Antwerp plant, which employs some 2,700 workers. Belgium says it is ready to give €300 million to upgrade the factory and another €200 million to buy the building under a sale and leaseback operation.

A German official, meanwhile, confirmed Wednesday that Chinese carmaker Beijing Automotive Industry Corp. is also interested in Opel. The official spoke on condition of anonymity because BAIC's interest has not been made public.

German newspapers Bild and Financial Times Deutschland reported BAIC's offer includes a guarantee to preserve the four Opel factories and all jobs in Germany for two years. Neither newspaper identified sources.

Steg, the government spokesman, said the Chinese suitor would not attend Wednesday's meeting.

Merkel's key ministers; governors of the four German states that have Opel plants; Fiat chief executive Sergio Marchionne, were to attend the meeting, along with representatives from Magna and possibly Ripplewood, GM and the U.S. Treasury Department.

Associated Press Writer Barbara Schaeder in Brussels contributed to this report.