GM likely to make Opel plans clear within 24 hrs

Written by Reuters | Frankfurt | Updated: Aug 27 2009, 02:51am hrs
General Motors may make clear within the next 24 hours whether it wants to keep its European carmaker Opel rather than sell it, a German labour representative said on Tuesday.

Armin Schild, IG Metalls leader in the state of Hesse where Opel has its headquarters, said the fact that GMs options for Opel had come to light ahead of an official announcement could mean that they were under serious consideration.

I see that as a bad sign for the future of Opel, Schild told German television station ZDF.

Sources with knowledge of the deliberations told Reuters on Monday GM was considering a plan to raise $4 billion to keep Opel rather than selling the unit to one of two biddersCanadian auto group Magna or Belgium-based RHJ International.

GM decided earlier this year to spin off Opel, its unit for some 80 years, saying it needed billions of euros in state aid to avert job cuts and site closures.

The possible reversal of that plan comes against a backdrop of escalating labor tension and political pressure over GMs slow-moving effort to sell control of Opel and British affiliate Vauxhall.

Talks to sell Opel have gone on for months and have become a political hot potato ahead of German elections in September, because of the state support involved and the thousands of job cuts expected to follow any sale.

German Chancellor Angela Merkel and German states have been putting pressure on GM to pick Magnas offer, made together with Russian partner Sberbank, because they think Magna would can save more jobs.

In Germany, Opel employs over 25,000 in four major plants making everything from three-door Corsa subcompacts to Zafira vans. In the UK there are two factories producing automobiles under the Vauxhall badge. Opel has other facilities in Belgium, Poland and Spain.

GMs board was expected to pick a buyer for Opel at a meeting on Friday, but the US carmakers directors declined to endorse a sale to either party, prompting unions to threaten spectacular measures to force a decision.