GM's Opel future raised in German coalition talks (Roundup)

Oct 9, 2009, 13:40 GMT

   Berlin - Berlin's state-backed rescue plans for the US carmaker General Motors Co's (GM) troubled European unit Opel emerged Friday as an issue in the talks to form a new German government.

   'My fears are that it has not been correctly thought through,' said Rainer Bruederle, a leading member of the business-friendly Free Democrats (FDP).

   The FDP, which garnered about 15 per cent of the vote at last month's national German election, entered negotiations this week to form a new coalition government with Chancellor Angela Merkel's Christian Democrat-led conservative bloc.

   GM announced last month plans to sell off a majority stake in Opel to a consortium led by the Canadian-Austrian auto parts group Magna International.

   Detroit-based GM was expected to sign off in the coming weeks on the agreement with Magna, which was backed by Germany's outgoing government, comprised of Merkel's bloc and the Social Democrats.

   Under the deal, Berlin is to provide 4.5 billion euros (6.5 billion dollars) in state-backed guarantees to help Magna restructure the GM European subsidiary.

 However, Bruederle, who has been mentioned as a possible economics minister in the new CDU-FDP coalition government, said that a European solution should be found for Opel

   Indeed, the Berlin-backed Magna deal has also angered other European countries where Opel has operations, including Spain, Belgium, Poland and Britain.

   They have claimed that the German government guarantees would mean that Opel factories in their nations would bear the brunt of the job cuts under Magna's restructuring plans.

Speaking in Berlin Friday following talks with Magna chief Siegried Wolf, Spanish Industry Minister Miguel Sebastian said he had called on Magna to provide long-term guarantees that Opel's plan at Figureruelas near Saragossa would remain open.

Otherwise, Sebastian said, Spain would not provide any financial support for the Opel rescue plan.

In particular, Madrid is concerned that Opel production facilities based in Spain could be moved to Germany.