Germany has reached a landmark deal with Magna, General Motors and governments to save Opel from the imminent bankruptcy of its US parent, German leaders said on Saturday.
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Finance minister Peer Steinbrueck told Reuters outside Chancellor Angela Merkel’s offices that a comprehensive accord had been forged.
“I can tell you that a deal has been reached,” Steinbrueck said shortly after 2am German time after the six-hour meeting ended. He said the agreement included bridge financing for Opel worth EUR1.5bn (US$2.1bn) and a trustee model for the German carmaker.
Siegfried Wolf, co-CEO of Magna International, cautioned there were still details to be ironed out. “In five weeks’ time we should have the formal signing of the contract,” he told Reuters.
Hesse state premier Roland Koch said, for example, the state assemblies in both Hesse and North Rhine-Westphalia – two of four states with Opel plants – would still have to endorse it. He said he hoped that could be completed by Sunday.
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By GlobalDataLeaders of all four states have endorsed the deal. Steinbrueck said US Treasury representatives at the meeting had also backed the agreement.
Economy Minister Karl-Theodor zu Guttenberg renewed his reservations about risks involved with the rescue but added there would also have been risks if Opel declared bankruptcy.
Magna and Opel had presented their plan to senior German officials and representatives of the US Treasury to win their support and ensure the release of the financing that Opel desperately needs to survive over the coming months.
An agreement between GM and Magna was a first step toward securing the future of Russelsheim-based Opel, which has been under GM’s control for the past 80 years and traces its roots in Germany back to the 19th century.
“I think this is the start of a new future for Opel, for the workers, the company and the brand,” GM Europe head Carl-Peter Forster told Reuters. He added, however, that there would still be some hard negotiations on the fine print ahead.
The German government had been scrambling to safeguard Opel’s future before GM files for bankruptcy, a step which was expected to come by Monday.
The trustee solution would protect Opel from creditors in a Chapter 11 filing in US bankruptcy court.
A first round of talks between Germany, the US government and GM collapsed amid mutual recriminations on Thursday morning, prompting Berlin to set a new round of negotiations for Friday.
Fiat, Magna’s main rival in the battle for Opel, had said just hours before the talks were to begin that it would not participate, leaving opportunity open for Magna, which had been in intense discussions with GM representatives for at least 24 hours.
Talks had earlier collapsed on Thursday when Washington balked at Germany’s plan to temporarily place Opel assets in a trust to shield them from GM creditors. Berlin responded by refusing to release EUR1.5bn (GBP1.3bn) in bridge financing for Opel.
