BERLIN’S RESCUE effort for beleaguered Opel is going down to the wire after German politicians baulked at an apparent demand for an extra €300 million from parent company General Motors (GM).
Rescue talks broke down at 4am yesterday amid some confusion over the GM demand and will recommence tomorrow morning.
“That was a bizarre night,” said Karl-Theodor zu Guttenberg, Germany’s economics minister.
“The talks were turned upside down by GM’s unexpected demands.”
GM chief executive Fritz Henderson replied that GM was not making any new demands. It had always sought a €450 million up-front payment, he said, while Berlin thought just €100 million was necessary.
“Any confusion that was caused by this we take responsibility for,” said Mr Henderson. “We’re trying to find common ground in Europe in what is clearly a tense situation.”
This short-term credit is in addition to a €1.5 billion government- backed line Berlin will provide if GM severs ties entirely with Opel.
On Monday GM faces a US government deadline to present a rescue strategy or file for bankruptcy.
Time is running out for a deal. Politicians in Berlin are anxious to shield Opel from being dragged down into insolvency by its parent company.
The German government has suggested taking temporary ownership of the company while it weighs up offers from potential suitors including Fiat and Magna, an Austrian-Canadian car parts company.
Tempers began to fray at the end of 11 hours of talks early yesterday morning in Berlin, with glassy-eyed German politicians making clear they felt duped by GM.
While German politicians stayed up half the night at talks chaired by chancellor Angela Merkel, they complained that the US sent a low-level treasury official with no decision-making powers. The US government “could have made more of an effort” with its choice of representative, said Mr zu Guttenberg.
After the treasury official broke off talks several times to telephone with superiors in Washington, the Germans sidelined him.
With 26,000 employees and elections in September, the Opel rescue is such a political priority in Germany that other European states with Opel plants fear they will lose out in any rescue deal.
“If we didn’t have elections in September the matter would have been settled long ago,” said German car analyst Willie Dietz on German radio.
“No politician would have bothered with it and Opel would have declared bankruptcy.”
