Strong signs remain General Motors and Magna International will ink a deal to sell a majority stake in Opel before the end of the week though not, it seems, today.
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German business daily Handelsblatt had reported earlier that the deal would be signed late on Thursday (15 October), adding that the long-drawn out saga was supposed to be closed on Tuesday but further negotiations with union officials and questions of financing had pushed back the signing.
Sources with knowledge of the situation told just-auto early today they had late yesterday expected the signing to occur on Thursday afternoon but had also stressed it could slip, maybe to Friday, as there was still a lot of detail – particularly legal aspects – to be finalised. That view was supported late this afternoon as a variety of media reports, citing anonymous sources, said a Friday signing was now most likely, though that could slip into early next week should last-minute loose ends not be tied up.
Dow Jones Newswires had cited “people familiar with the situation” as expecting GM to announce a definitive deal on Thursday.
That report said the signing was expected to pave the way for “intense talks” on jobs and production at loss-making Opel ahead of a closing still expected at the end of November.
Dow Jones said stakeholders had remained locked in talks with Germany and other European governments that would provide EUR4.5bn in aid to turn around the unit.
While Magna had secured concessions from unions in Germany and the UK, it still needed to reach a deal with Spanish workers, the news agency noted.
Dow Jones added that Roland Koch, premier of the central German state of Hesse, said last Tuesday that the state aid plan would not be finalised by Thursday, but noted that Germany won’t make its state aid conditional on other European countries with Opel plants also providing capital.
Vauxhall and Opel have been operating with emergency loans provided by Germany, but talks with other European governments over participating in the rescue have moved slowly. The UK and Spain have expressed concern that Germany’s involvement might lead to more painful cutbacks elsewhere.
German economy minister Karl-Theodor zu Guttenberg on Wednesday told Reuters his government was hopeful Britain was close to giving a commitment on financial aid for Opel.
“We’re still waiting for the respective commitments,” Guttenberg told the news agency in Berlin. “However, from what I hear, the situation in Britain on this has got a lot better.”
Opel’s works council head Klaus Franz reportedly said German workers’ representatives had helped clear the way for a deal in Britain, (saving 600 jobs at Vauxhall) by agreeing that some production should be moved there from Germany.
GM chief executive Fritz Henderson earlier on Thursday told a press conference in South Korea that GM was working “very, very diligently” with its partners to try to finalise the deal.
GM UK executives last week said they expected a memorandum of understanding would be signed this month with a definitive agreement inked some time in November.
Under a preliminary deal announced in Berlin on 10 September 10, GM will sell 55% of Opel to Magna and Russian state-owned lender Sberbank. Employees will hold 10% and GM will retain the remaining 35% stake.
German chancellor Angela Merkel’s government, with the security of 25,000 Opel jobs in mind, agreed to back the deal with EUR4.5bn (US$6.7bn) of taxpayer funding in the form of loan guarantees.
The deal has been beset in recent weeks by wrangling between European countries over financing. There have also been negotiations between the unions, local GM units and governments over the 11,000 job cuts Europe-wide Magna has said it needs to make.
In addition, EU competition commissioner Neelie Kroes has been scrutinising the transaction to determine if German state aid would be contingent on local plants not being closed, which would make it illegal.
Graeme Roberts
