Decision time

Pressure for a decision was mounting after the premier of Opel's home state of Hesse, Roland Koch, said on Friday that Canadian-Austrian group Magna's offer for the carmaker was the most attractive for Germany and that Fiat's rival bid was disappointing.

"I think there is a ranking in which the offer from Magna is closest to the hopes and wishes of many in the German political arena but also the workers," Koch said in an interview with German radio.

"There is a very interesting bid from a financial investor with the group from Ripplewood, and surely some are disappointed that the Fiat bid is very far from what some had hoped," he added.

Magna, Fiat and industrial holding company RHJ International, the Brussels-based subsidiary of US financial investor Ripplewood, submitted offers for Opel by a May 20 deadline.

Addressing growing media speculation, government spokesman Thomas Steg called for calm, saying that any premature speculation on a political comment on Opel could affect a government negotiating position. He said the government would be looking at three key factors: a deal for carmaker Opel that secures the most jobs and sites in Germany and does not burden taxpayers.

Steg went on to say that until the government had met with industry experts and the federal state representatives no preference could be drawn.

Steg also reiterated that the primary decision lay with the US, which still has to announce whether it is selling GM Europe, thus offering up Opel for tender.

The US government has given GM until June 1 to restructure its operations and prove it can be viable without state aid, or face probable bankruptcy.

According to Koch, none of the three offers would save all the jobs at Opel, which has four German plants employing over 20,000 people. But he said that Magna had new ideas, new markets and new clients that were particularly suitable to German considerations.

Magna co-chief Siegfried Wolf said that his company would maintain all Opel's German bases as well as the company's German headquarters.

"Not every job can be secured by a new European Opel company but there are perspectives that are particularly interesting to Germany as Opel's base. And in this respect Magna's suggestions are the most interesting," Koch said.

There have been media reports that Russia's largest lender Sberbank is discussing the possibility of providing a financial guarantee as part of Austro-Canadian auto parts maker Magna's bid in the form of guarantees.

Though the decision on who gets Opel will be taken by GM, the German government will also play a big role because it would likely have to supply billions of euros in financing guarantees to the eventual winner.

This has made the Opel tender a political hot potato as the chancellor is just four months away from a general election and must decide how to save jobs and tax-payers money without losing votes.

Fiat chief executive Sergio Marchionne is looking to create the world's second biggest carmaker, after Japan's Toyota, by adding the assets of Opel and Vauxhall to Fiat's own brands and those of US carmaker Chrysler.

German media reports, however, said the Fiat plan would involve total job cuts of about 18,000, compared to about 10,000 each for Magna and RHJ. Fiat is also seeking some 7 billion euros ($9.7 billion) in government support, about 2 billion more than Magna and RHJ require.

tw/Reuters
Editor: Nick Amies