Chancellor Angela Merkel's coalition will dig in its heels over the choice of Magna International Inc. as the buyer of General Motors Co.'s Opel unit in talks with the two remaining bidders today, officials said.
"I cannot imagine, under any circumstances whatsoever, that the federal government or the states will reverse their decision on Magna," Juergen Reinholz, the economy minister of Thuringia state, where Opel employs about 1,800 workers, said in a telephone interview.
While Germany backs Aurora, Ontario-based carparts maker Magna, GM continues to hold talks with RHJ International SA, the Brussels-based investor whose bid GM chief negotiator John Smith said offers a "simpler" solution. Reinholz, a member of Merkel's Christian Democratic Union, said Opel has no need of "a fast-track overhaul by a profit-driven financial company."
Merkel's government, facing national elections Sept. 27, agreed to back Opel's sale with 1.5 billion euros ($2.2 billion) in short-term loans in May. Prime ministers from two of the four German states with Opel plants said over the weekend that those funds won't be available to RHJ, whose automotive assets include some former holdings of Ripplewood Holdings LLC, the private- equity firm founded by Timothy Collins.
No Locusts
RHJ's bid is unlikely to win approval in Germany, where "all financial investors are lumped into the category of locusts," said Uwe Andersen, a politics professor at the University of Bochum, where Opel has about 5,200 workers.
Labor unions and Opel workers prefer Magna, Andersen said in an interview. "The unions view financial investors as a problem because they assume they only want short-term profit at the expense of the long-term life of the company."
Of 612 lawmakers in the lower house of parliament in Berlin, 223 are union members, according to the DGB labor union federation.
Even the prospect of elections in eight weeks won't drive a wedge between the parties on Opel, according to Joachim Poss, a finance spokesman for the Social Democratic Party, Merkel's coalition partner since 2005 and election rival.
The U.S. carmaker "faces equal resolve from the federal government, the states and Opel workers in their support for Magna," Poss said in an interview. "This is solidarity that goes across party lines and it can't just be set aside."
Berlin Talks
German officials led by Deputy Economy Minister Jochen Homann, who heads the government's Opel task force, and representatives from the four Opel states will hold separate talks with Magna and RHJ from 3 p.m. in Berlin, according to Andreas Maruschke, a spokesman for the Economy Ministry in Thuringia, one of the four states.
