Germany Fails To Find Opel Solution

BERLIN (AP) -- Germany's foreign minister sought support Thursday from U.S. Secretary of State Hillary Rodham Clinton in securing the future of General Motors Corp.'s Opel unit after talks stalled over new financing complications.

Germany had hoped to secure an agreement in talks that dragged through Wednesday night to shield Opel -- which employs 25,000 people in Germany -- from a looming GM bankruptcy. The government wants to make it legally independent under a trustee, then provide bridge financing while Opel looks for a new, permanent owner.

But German officials blame financing needs brought up by GM totaling euro300 million ($418 million) for preventing a decision at all-night talks led by Chancellor Angela Merkel. The government has offered euro1.5 billion in bridge financing.

Foreign Minister Frank-Walter Steinmeier spoke by phone Thursday with Clinton to seek "support in the search for a solution for Opel's future," his office said in a statement.

It added that Clinton said she would intercede for the "greatest possible American support" from Treasury Secretary Timothy Geithner.

More talks were expected Friday after the parties have had time to come up with a response.

The German government is negotiating with two potential suitors -- Italy's Fiat Group SpA and Canadian auto parts maker Magna International Inc., which submitted a bid along with Russian lender Sberbank -- as well as GM and the U.S. Treasury Department.

Steinmeier earlier Thursday said that the urgency of the matter was "not sufficiently clear" in the U.S.

"The communication between Europe and the USA is not good enough," Steinmeier said. He called for "constructive participation by General Motors and the U.S. government."

GM Europe spokesman Chris Preuss said that the financing needs at issue were not additional to the money already sought. He said the issue was how much of the total was needed quickly -- "there was a bigger immediate need than was originally indicated."

"Our intention is to get a deal done still this week," he said.

After eight hours of talks hosted by Chancellor Angela Merkel at her Berlin office, Finance Minister Peer Steinbrueck said that Fiat and Magna remain in the running after a third suitor, U.S. financial investor Ripplewood Holdings LLC, bowed out.

GM would choose any new investor, but Germany plays a key role because it will decide whether a new owner would get further government assistance to make the deal happen, and if so what kind. National elections in September are putting pressure on politicians to find a solution quickly that avoids as many layoffs as possible.

The government needs further information from GM and the U.S. Treasury Department before decisions can be made, Guttenberg said. He said he expected it Friday.

Steinbrueck said that Fiat and Magna "have been asked by GM and the US Treasury to do their homework" on how they would handle the additional short-term cash needs and rework their concepts. The results also are expected on Friday, he said.

The ministers insisted that neither of the two investors was being favored at present, although Steinbrueck singled out Magna's willingness to take on the additional short-term cash burden.

"I was very pleased to see that Magna wants to be helpful in solving this additional cash problem, that seems very attractive," Steinbrueck said.

Merkel had brought together several of her ministers and the governors of four German states that have Opel plants with representatives of GM, the U.S. government and the bidders for a summit aimed at putting Opel on the road to safety.

Hours earlier, Opel's supervisory board approved a plan to package GM assets for a new investor by pooling GM's European plants, sales operations, patents and other assets, excluding Sweden's Saab unit, debt-free under the German-based Adam Opel GmbH subsidiary.

The consolidation would help keep Opel's assets separate from a bankruptcy filing by GM -- fulfilling a demand by the German government to prevent tax money from flowing to the U.S.

Separately, the European Commission said it would host talks among ministers on Friday to coordinate government efforts to save GM's European operations.

Opel and sister brand Vauxhall also have operations in Belgium, Spain and Poland among other countries. GM officials will not be present.

Associated Press Writer Melissa Eddy contributed to this report.

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