Magna International Inc., one of at least three competing bidders for General Motors Corp.'s Opel unit, aims to join Russian partner OAO Sberbank in investing as much as 700 million euros ($981 million) in the deal.
German state leaders said today that they'll focus on working out government backing for the offer by Magna, Canada's biggest car-parts maker, which would give the manufacturer a 20 percent stake in GM's Opel and Vauxhall divisions in Europe. Sberbank, Russia's largest lender, would own 35 percent, matching the remaining holding of Detroit-based GM, Magna Co- Chief Executive Officer Siegfried Wolf said today.
"Opel has a very strong, global brand, and Vauxhall is strong, too," and the GM units have potential to return to profit in a few years, Wolf said a news conference at Magna's European headquarters in Oberwaltersdorf, Austria.
GM is selling at least a minority stake in its European operations as it confronts a U.S.-government deadline of June 1 to reorganize worldwide or be forced into bankruptcy. Fiat SpA, Italy's biggest manufacturer, and RHJ International SA, a Brussels-based buyout firm with automotive assets, are also seeking stakes in Opel and Vauxhall.
9,000 Job Cuts
Magna's plan may involve eliminating 9,000 jobs in Europe and would need as much as 5 billion euros in government loan guarantees, Wolf said. GM had already asked employees at Ruesselsheim, Germany-based Opel and Luton, England-based Vauxhall to provide $1.2 billion in labor-cost concessions. The workers would own 10 percent of the GM Europe operations, according to Magna's proposal.
Roland Koch, prime minister of the German state of Hesse, called Magna the "preferred bidder" on any Opel transaction and said authorities wouldn't pursue talks with other bidders at the moment. Ruesselsheim, a suburb of Frankfurt, is located in Hesse. Juergen Ruettgers, head of the state of North Rhine- Westphalia, told journalists in Berlin that Fiat's proposal was "not specific enough."
All three offers for Opel are "still in play," German Economy Minister Karl-Theodor zu Guttenberg said at the briefing, which followed a meeting of state and federal officials to review the proposals that the suitors submitted on May 20. Ruettgers said he can't support Magna's "unfair" job- cut plan, under which 2,200 of the 2,600 positions eliminated in Germany would affect the plant in Bochum, in his state.
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