August 22, 2009 / 10:14 AM / in 8 years

German politicians blast GM for delaying Opel deal

BERLIN (Reuters) - German politicians reacted angrily on Saturday to the failure of carmaker General Motors to choose a buyer for its German unit Opel, prompting an appeal to the United States government to help broker a solution.

<p>The emblem of an Opel vehicle is pictured in front of an Opel car dealer in Himmelkorn, near Leipzig August 9, 2009. Picture taken August 9, 2009. REUTERS/Pawel Kopczynski</p>

Despite German pressure to back a bid by Magna International MGa.TO, General Motors Co GM.UL declined on Friday to name the Canadian automotive firm as the winning bidder for Opel, leaving the fate of the carmaker up in the air.

German Economy Minister Karl-Theodor zu Guttenberg said he believed a deal was still possible and that talks would continue, but there were angry words from around the country where the carmaker has plants employing some 25,000.

Juergen Ruettgers, premier of North Rhine-Westphalia, Germany’s most populous state and home to the Bochum works, issued a statement saying the delay was “intolerable.”

“The United States government now shares responsibility for finding a way past GM’s leadership weakness and helping us finally to reach a sustainable decision,” he said.

The German government, which is barely a month away from a federal election, has offered financial backing for Magna’s bid because it believes it would be the best option to save jobs.

Two sources familiar with the talks said GM directors wanted Berlin to say what financing would be available to back a rival Opel bid by Brussels-based financial investor RHJ International.

Economy Minister Guttenberg told the Hamburger Abendblatt Germany had provided GM with all the necessary information.

“There is still room for an agreement,” he said.

Berlin and the German states that host Opel plants have made clear they want Magna to get the carmaker and are set to provide 4.5 billion euros ($6.4 billion) in state aid to make it happen.

Dismay about the lack of clarity over Opel’s fate extended from conservatives such as Ruettgers to the center-left Social Democrats (SPD), who rule together nationally in coalition.

MAGNA STILL FAVOURED

One source close to the talks said the next GM board meeting would be at the start of September and that two bones of contention were likely to be discussed over the next week.

One was that Berlin was insisting GM should step in if the German aid proved insufficient. The other was that GM wants to receive royalties from Opel for the use of its technology even if the German carmaker files for insolvency.

Magna remained the favored candidate, the source added.

German holds a federal election on September 27, and finding a buyer for Opel has become a focal point of the campaign.

Foreign Minister Frank-Walter Steinmeier, who is leading the SPD’s bid to unseat incumbent Chancellor Angela Merkel, said he would continue to canvass for a deal with Magna.

“There can only be state aid for a proposal that we in Germany find convincing,” he said.

Kurt Beck, SPD premier of Rhineland-Palatinate, another Opel state, said the failure to pick a buyer was “completely unacceptable” and urged Merkel to intervene directly.

Roland Koch, conservative state premier of Hesse, where Opel is based, said he was “extremely annoyed,” by Friday’s outcome.

“All the relevant questions have been resolved between GM and Magna,” he said. “There’s absolutely no justification for this postponement.”

Additional reporting by Philipp Halstrick; Editing by Keiron Henderson

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