August 7, 2009 / 2:39 PM / 8 years ago

Opel unions want Merkel to intervene

FRANKFURT (Reuters) - Opel’s top labor leader and board member, Klaus Franz, wants German Chancellor Angela Merkel and her foreign minister to intervene personally in stalled talks between Magna and General Motors and push for progress, he told Reuters on Friday.

<p>The Reichstag building, seat of the German lower house of Parliament Bundestag, is reflected in an Opel car emblem in Berlin, August 4, 2009. REUTERS/Tobias Schwarz</p>

Merkel and Frank-Walter Steinmeier, the two main candidates in the upcoming general elections next month, would be in a unique position to pressure GM Chief Executive Fritz Henderson into selling Opel to Magna since Germany would likely fund a deal with billions in aid.

“If there is no agreement by the middle of next week then I would like Merkel and Frank-Walter Steinmeier to request the presence of Fritz Henderson in Berlin,” Franz said.

The meeting could serve to iron out the last remaining differences preventing a sale to Magna, he explained.

“I would certainly hope for a breakthrough,” he said.

Franz, whose opposition to Fiat helped end the Italian carmaker’s hopes to win a bid, has thrown his entire weight behind Magna while GM’s negotiator John Smith has praised a rival bid by RHJ.

To make its bid more attractive to the German government, RHJ has offered to take only 3.6 billion euros in state aid should it win the bidding for Opel, down from an initial 3.8 billion euros, but wants to pay lower sales royalties to GM in return, a source with knowledge of RHJ’s offer said.

Shop steward Franz, meanwhile, hopes GM recognizes that a badly needed restructuring of Opel can only work with his support and his fellow labor leaders who believe they can help the new owner trim 5.7 billion euros ($8.18 billion) in European structural costs through 2014.

John Smith said on Thursday that a deal with RHJ was virtually wrapped up, signaling all GM now needed was Berlin’s approval for RHJ but politicians are loath to back ex-Dresdner banker Leonhard Fischer and his Brussels-based private equity firm linked to U.S. buyout firm Ripplewood.

Henderson is already meeting with Magna Europe chief Siegfried Wolf on Friday in Detroit.

Financially Opel could make do with the 1.5 billion euros loaned out by the German government for several more months without requiring additional aid, he added.

“We can easily make ends meet until the end of this year or the start of the next one -- at least based on the current situation and order books,” Franz said.

($1=.6966 Euro)

Writing by Christiaan Hetzner

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