Day Two of General Motors’ board meeting is dawning with no real signs of that Opel Decision and even the possibility it would be deferred again.
The White House has made clear its approach is ‘hands off’ and that also appears to be the view of GM CEO Frederick ‘Fritz’ Henderson who won’t make a specific recommendation when he meets directors today, sources told the Wall Street Journal (WSJ).
Those sources also said the new board could also decide to postpone a decision until later in September, while other media reports have said it could be deferred into October.
That could jeopardise billions in financing that Germany is offering in an effort to save jobs, one person involved in the negotiations told the WSJ.
“There is a lot of food for thought here,” a source said. “It’s conceivable that they will not make a decision.”
“With every day that goes by where we don’t restructure Opel, our window for fixing the business gets smaller,” another source said.
On the table is a sale to a Magna-Sberbank-GAZ consortium; a sale to RJH international; a retention and restructure; or liquidation. People involved in the talks told the WSJ liquidation was the least likely outcome.
The German government and labour unions want the Magna sale because that would protect German jobs and makes commercial sense.
Reports in the last day or so have also suggested GM has underestimated what it would cost to restructure Opel itself.
That could be $1.45bn higher than the “overly optimistic” estimate prepared by the automaker in June, according to a KPMG report presented to GM’s board on Tuesday and seen by the Reuters news agency.
KPMG said the automaker would face “an additional cash need of up to $6.1bn” to keep Opel.
GM had previously estimated that it would need $4.65bn in cash to keep Opel and repay a roughly $2bn bridge loan from the German government, the report said.
European unions at Opel and Vauxhall published an open letter on Tuesday imploring GM to make a speedy decision about what to do with its European brands.
A top adviser to German chancellor Angela Merkel added to the calls on Wednesday, calling for a “quick decision” from GM.
“It is important for the employees and Opel plants in Germany that we are informed as soon as possible,” the adviser, Michael Meister, told news agency AFP.
A Magna source told AFP that the company had no intention of withdrawing its offer and was “hopeful there would be some kind of conclusion in the next week or two.”
GM originally planned to sell off a majority stake in Opel but recent press speculation has said ‘new GM’ would now like to preserve the brands in order to maintain access to the European market and help it develop smaller, more fuel efficient, vehicles as well as keep intellectual property out of Russia’s hands.