General Motors Co.'s Opel unit may be forced into bankruptcy should the U.S. automaker and the German government fail to agree on a buyer, according to three people close to the trust that controls the division.
The trust's five-member board doesn't back an offer by Magna International Inc., the Canadian partsmaker preferred by Germany, said the people, who asked not to be identified because the talks are private. They said the officials favor a bid from investor RHJ International SA or pushing Opel into insolvency.
"I'm surprised at that," said David Cole, chairman for the Center for Automotive Research in Ann Arbor, Michigan. "I would think that it's a whole lot better to deal with somebody in the business already than a pure financial buyer."
GM is concerned that a Magna deal might imperil control of some patents, one of the people said. Germany, which agreed to back Opel's sale with 1.5 billion euros ($2.1 billion) in short- term loans, picked Magna as its preferred bidder in May to protect jobs amid the worst recession since World War II.
The Opel trust was set up as an interim owner of the Ruesselsheim, Germany-based unit, and oversees talks with the suitors. It also has to approve any business decisions by Opel, including which bidder will win.
A final decision on the sale will be made by GM, which emerged from bankruptcy July 10 and is controlled by the U.S. Treasury.
‘Soap Opera'
Opel's fate "has been an interesting soap opera," said Joseph Phillippi, an analyst at AutoTrends Consulting in Short Hills, New Jersey. "GM might be interested in regaining control of Opel because there's a tremendous amount of technology at stake."
Nicole Mommsen, a spokeswoman for the Opel trust, declined to comment and referred to a July 25 statement by the trust that it hasn't yet made a preliminary decision on the bids.
GM signed a non-exclusive memorandum of understanding with Magna in May. It has continued to hold talks with Brussels-based RHJ, whose automotive assets include some former holdings of Ripplewood Holdings LLC. With the Magna deal at risk, bankruptcy becomes an option while Detroit-based GM still prefers a sale.
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