German Opel aid for Magna not certain, lawmaker says

Germany may withhold 3 billion euros ($4.44 billion) in funding for Magna International Inc.'s bid for the Opel unit of General Motors Co. should PricewaterhouseCoopers LLP fail to endorse the takeover plan, according to a senior German lawmaker.

The German government, already keeping Opel afloat with 1.5 billion euros in short-term loans, has asked the consulting company to examine the viability of the strategy proposed by Magna and Russian partner OAO Sberbank.

"We need PwC's conclusions to say anything reliable about Opel's future," Georg Nuesslein, deputy chairman of the German Parliament's economics committee, said in a telephone interview today. "There's absolutely no automatism" between GM's decision of Sept. 10 to sell Opel to Magna and Germany helping to bankroll the Canadian parts-maker's bid, he said.

Germany may ask Aurora, Ontario-based Magna to improve its plan as a precondition for paying out remaining aid should PricewaterhouseCoopers find fault with the existing proposals, said Nuesslein, whose committee was briefed on the takeover by German Deputy Economy Minister Peter Hintze in Berlin today.

Opel's reorganization following a sale to Magna and Sberbank may cost 10,900 jobs, 4,100 of them in Germany. The scrutiny by PwC won't be concluded until after federal elections in the country on Sept. 27, with the report likely to come late next month or in early November, Nuesslein said.

No Findings Yet

The accountancy firm has yet to determine whether Ruesselsheim, Germany-based Opel "has a chance" to survive under Magna's plan, said the lawmaker, who is a member of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel's ruling Christian Democrats.

Projections from the Canadian manufacturer suggesting that Opel will sell 65,000 cars in Russia next year are "overly optimistic," he said.