Investment plan
May 15, 2009
Car dealers at General Motors' Opel unit have announced plans to buy a stake in the struggling automaker, investing up to 500 million euros ($680 million).
Representatives from 25 countries of the European Opel Dealer Association met in Vienna on Friday to endorse the plan. In return the Euroda dealer group want a 10-15 percent stake in the German subsidiary and a seat on the supervisory board.
Under the scheme dealers at Germany's Opel and Britain's Vauxhall would pay 150 euros into a fund for each vehicle sold over the next three years.
"We demand a fair equity share in the new company, representation in the supervisory board, and obviously, a fair financial return on our investment," said Euroda chairman Jaap Timmer.
Timmer admitted asking retailers to pay into the fund would hurt them, especially those in Central and Eastern Europe, "but it would be far worse if we had no manufacturer at all."
The car dealers association will now enter talks with the German government and other European countries where Opel cars are manufactured, as well as potential investors like Italian carmaker Fiat or Canada-based car industry supplier Magna.
Temporary trustee scheme
Meanwhile state premiers in four German states where Opel have production plants have endorsed a proposal by the German government to set up a trustee ownership scheme to temporarily take over German carmaker Opel if its US parent General Motors files for bankruptcy.
The move, which GM says would require state guarantees worth more than one billion euros, would give Opel more time to find a suitable partner for the future.
More than 25,000 people are employed by Opel in Germany at Ruesselsheim, Bochum, Kaiserslautern and Eisenach.
German Economics Minister Karl-Theodor zu Guttenberg has said Italian carmaker Fiat and Canadian parts manufacturer Magna are due to present the details of their respective bids to take over Opel by May 20.
But according to German newspapers Financial Times Deutschland and Frankfurter Allgemeine Zeitung there is opposition from the Obama administration to the temporary trustee scheme, presenting Europe's car dealers with another headache as they seek to overcome a drop in sales.
With a June 1 deadline imposed by the Obama administration to restructure its operations and pay off debts to its creditors looming, the future for dealers at Opel's American parent General Motors looks bleak. On Friday GM announced massive cuts in its dealership network, terminating the contracts of 1,100 of its 6,000 dealers.
nrt/Reuters/AP/dpa
Editor: Chuck Penfold