Spain hits out at German role in Opel deal (Roundup)

Sep 15, 2009, 16:41 GMT

Berlin - Spain accused the German government Tuesday of failing to provide full information to its European partners on the sale of carmaker Opel to a Russian-Canadian consortium.

Spain had no desire at present to contribute state funds to the bail-out of the unprofitable General Motors' subsidiary, Spanish Industry Minister Miguel Sebastian said in Berlin.

'Today we have been asked to foot the bill without seeing the menu,' Sebastian said after talks between the German government and other European countries where Opel has plants.

A spokesman for the German Economics Ministry said all those involved were seeking a basis under which the financial costs of restructuring Opel could be shared.

The talks came amid worries that German Opel factories could get preferential treatment by the new owners after Germany pledged 4.5 billion euros (6.7 billion dollars) for a rescue package.

Magna plans to axe 10,500 of Opel's 50,000 jobs across Europe, of which more than 4,000 are to be cut in Germany alone, Magna's European chief Siegfried Wolf confirmed at the Frankfurt International Motor Show (IAA) on Monday.

The economics ministry spokesman said details of state financing could not be worked out until a business plan was put forward by GM and the new owners, Canadian car parts manufacturer Magna and Russia's Sberbank.

Germany has already paid out 1.5 billion euros to keep Opel afloat. But it is not clear whether other countries will contribute to the remainder of the rescue outlay.

In Spain, the Opel factory in Zaragoza is under threat, while Belgium is angry at Magna's plans to shut down the plant in Antwerp. Other countries affected by the restructuring are Poland, Austria, Hungary and Britain, where the cars are sold under the Vauxhall brand.

The meeting in Berlin was also attended by a director from the office of Neelie Kroes, the EU's competition commissioner, who will then report back to Brussels.

In a speech to the European Parliament on Monday, Kroes said state aid 'cannot be subject ... to additional conditions concerning the location of investments and/or the geographic distribution of restructuring efforts.'

Of the Magna deal Kroes said, if the German authorities 'have effectively linked the provision of aid to a single bidder,' she would want to know, 'why they regarded that bidder's business plan as preferable from an industrial and commercial point of view.'

Meanwhile, German car manufacturers BMW and Volkswagen said they were rethinking their cooperation with Magna, since the car parts supplier had become a competitor.

'Until now we have had good cooperation with Magna, but their strategy has changed,' said BMW's chief financial officer Friedrich Eichiner.

On Monday, VW chairman Ferdinand Piech had warned, 'As a corporation, we don't like it when our subcontractors become our competitors.'

VW is one of Magna's top clients.

Wolf previously said none of Magna's clients had threatened to jump ship over the Opel deal, adding that the car parts business would be kept strictly separate from the manufacture of vehicles.

General Motors announced last week it would sell 55 per cent of Opel to Magna and its Russian partner.