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27 May, 2009 07:48

Bidders line up for Opel

German Chancellor Angela Merkel will meet with bidders for GM’s German subsidiary, Opel, on Wednesday, including a consortium of Canada’s Magna and Russia's Sberbank, and the heads of its main rival, Italy’s Fiat.

German Cabinet ministers, representatives from Opel’s parent company General Motors, and the US Treasury Department will also take part.

Fiat's Chief Executive on Tuesday further improved his offer, saying he would need less money from the government and promising to keep most workers at Opel plants. Opel employs some 25,000 people in Germany alone. General Motors has until June 1 to sell the asset or face bankruptcy. Germany’s Economy Minister Karl-Theodor zu Guttenberg says no decision has been made yet, as all offers have their downsides

“The bids we have seen so far have their deficits as well, and what is absolutely unacceptable for the German taxpayer and for the german Government is that the whole risk lies on the shoulders of the German taxpayer. There is no preferred bid at the moment, absolutely not.”

Many German politicians say they favor the Magna-Sberbank offer. Fiat was under fire for not having attended a meeting of Opel's powerful Trade Union, with Klaus Franz, Opel chief employee representative, noting that the Union thought that the Magna bid was in pole position.

"Both investors agreed that Opel Vauxhall can only have a future with a highest degree of autonomy and independence from General Motors. Fiat was invited by us as the first company. Fiat did not take/accept this invitation. We think that this is unacceptable and a sort of provocation. According to the criteria that I've mentioned, our current opinion is that Magna is clearly in a leading position."