Tough sell

Representatives from European countries with Opel operations and EU commission officials gathered in Berlin on Tuesday to discuss the financial implications of the planned sale of General Motors' European subsidiary Opel to Austrian-Canadian auto parts maker Magna and Russian state-owned bank Sberbank.

Germany, a staunch supporter of the Magna deal which is contingent on state aid, has already extended a 1.5-billion-euro ($2.2-billion)bridging loan to keep Opel afloat.

Berlin has also pledged loan guarantees worth three billion euros once the sale is finalized and is now calling on European Opel partners to chip in.

However, not all European partners are thrilled by the prospect of contributing funds to a takeover which they fear may give Germany preferential treatment when it comes to job cuts and plant closures.

Europeans not convinced by Magna deal

Magna is planning to cut about 10,500 jobs if the Opel deal goes ahead, with about 4,000 job cuts expected in Germany.

Opel has about 25,000 employees in Germany, 7,000 in Spain, 4,700 at Vauxhall in Britain, 5,500 in Belgium, 1,800 in Italy, 1,600 in Austria and 1,500 in France. Belgium's Antwerp plant is likely to be shut down and Spain's Zaragoza operations may be relocated to Germany.

Spanish Industry Minister Miguel Sebastian said his country was currently unwilling to contribute state funds to the bailout of Opel.

"Today we have been asked to foot the bill without seeing the menu," said Sebastian after the Berlin talks.

Both Belgium and Spain underlined that they wanted more information before making any decision, and as a result, Tuesday's meeting did not produce any tangible results.

However, the German economics ministry said in a statement that agreement had been reached "to make an effort to lay the basis for a joint financing arrangement with a speedy evaluation process."

The ministry added that a detailed business plan from Magna as well as a restructuring assessment by an accountant would form the basis for further discussions.

Magna is expected to present the first concrete details of the planned Opel takover on Sept. 21, plus a business plan on Oct. 7, according to Spanish industrial ministry official Teresa Santero.

German car industry warns Magna

Meanwhile, some German car manufacturers have said they may rethink their cooperation with Magna because the Opel takeover would render Magna a competitor.

Volkswagen, which is one of Magna's top customers and Europe's largest carmaker, issued a similar warning on Monday. "As a corporation, we don't like it when our subcontractors become our competitors," said Ferdinand Piech, the head of VW's supervisory board.

BMW's chief financial officer Friedrich Eichinger gave a similar warning at the press opening of the 63rd Frankfurt motor show on Tuesday.

"Until now we have had good cooperation with Magna, but their strategy has changed," Eichinger said. "We must consider which technologies are going to fall into the hands of a competitor."

The co-president of Magna, Siegfried Wolf, has stressed that his group would establish "a strict separation between the supplier Magna and activities tied to Opel." He has also promised that the "protection of confidentiality" would be respected.

nk/dpa/AFP
Editor: Trinity Hartman