FRANKFURT, Germany — A person familiar with General Motors Co.’s talks on Opel said Wednesday that the company’s board of directors is reviewing four outcomes as it debates the future of its German-based unit, including the possibility of keeping Opel or letting it slide into bankruptcy protection.
The 13-member board, meeting in Detroit on Wednesday, is also discussing whether it should accept bids from a consortium of Magna International Inc. (TSX:MG.A) and Russia’s Sberbank or a competing offer from RHJ International, a Brussels-based investment house, the person told The Associated Press.
A recommendation, which would have to be approved by the trust overseeing Opel, could come with a formal announcement today.
Ruesselsheim-based Adam Opel GmbH, whose brands also include Britain’s Vauxhall, was transferred to a government-backed trust just ahead of parent GM’s bankruptcy. The trust holds 65 per cent of Opel, with GM holding 35 per cent.
Presumably, GM could also wait to make a decision on the fate of Opel at a later date, though that seems increasingly unlikely.
GM for months has stated its preference for the RHJ bid because the Brussels-based private equity firm is more likely to restructure Opel while preventing GM’s car designs and other technology from going to companies that compete against GM’s Chevrolet brand in Russia and other parts of the world.
But the German government has supported the Magna-Sberbank bid because they think it would preserve the most jobs in an election year. State-owned Sberbank has ties to Russian automaker GAZ, and GM is worried the Russian automaker could use Opel technology to compete with Chevrolet, which has grown in Russia.
If the board goes with RHJ or decides to keep Opel, it would be setting up a confrontation with the German government, which has offered C4.5 billion ($6.5 billion) in credit to support the Magna bid and wants to show it is preserving jobs before the Sept. 27 election.