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Germany, UK Discuss Future Of GM Europe

German and British economy ministers to discuss ways to save GM's European assets, including examining new bids, in case a deal with car parts maker Magna falls through.

BERLIN (AP) -- German and British economy ministers met Thursday to discuss ways to save General Motors Corp.'s European assets, including examining new bids, in case a deal with Canadian car parts maker Magna International Inc. falls through.

German Economy Minister Karl-Theodor zu Guttenberg told reporters the government only has a memorandum of understanding from Magna to acquire GM unit Adam Opel GmbH -- which includes Britain's Vauxhall -- and is still talking with other bidders.

Germany is in contact with a Chinese investor that came forward in the last two weeks, Guttenberg said, despite ongoing negotiations between the government, Magna and GM.

Guttenberg didn't name the Chinese investor. Last month, Beijing Automotive Industry Corp. had submitted a bid for Opel, but then retracted it.

"The government is handling the negotiations so that they will lead to success," he said.

Guttenberg said Germany would also cooperate with other European governments during the negotiation, particularly Britain, where Opel's sister brand Vauxhall is based.

"It's very necessary that our governments keep in close and direct contact on the future of our car manufacturers and the ties between Vauxhall and Opel and that we include other European members when it comes to the next steps to take," Guttenberg said.

Job preservation in Germany was a cornerstone of the plan put forward by Magna and Russia's Sberbank to acquire Opel and Vauxhall. British Business Secretary Peter Mandelson is also keen to save jobs at Vauxhall plants in Britain.

"We are together committed to creating a commercially successful and viable car manufacturing company based in Europe, able to compete globally, and we are prepared to advance this objective and underpin it financially, but on terms that must be acceptable to us," Mandelson told reporters.

He said any decision must be based on common commercial criteria, and must be acceptable to the European Commission.

"It is impossible to predict conclusively if the memorandum of understanding that we have now will translate into final agreement. We hope it will. But we also have to keep our mind open to alternatives if that memorandum of understanding does not convert into a final agreement. We are agreed on that," Mandelson said.