Toronto, Aug 25 (Inditop.com) General Motors’s new board is reportedly reluctant to sell its Opel unit to Canada’s auto-parts giant Magna International.
Magna, which is the world’s third largest part maker, and the Savings Bank of the Russian Federation (called Sberbank), have jointly submitted a $775-mmilon bid to acquire a 55 percent stake in Opel. Brussels-based financial investor RHJ International is the rival bidder.
German-based Opel is on the block as GM, which has received $50 billion bail-out from US and Canadian governments, undertakes massive restructuring plans.
Though the US government currently has 60 percent stake in GM, the Obama administration has decided not influence decision-making by the auto giant to sell Opel.
At their meeting Friday, GM’s new board of directors deferred accepting the winning bid by the Canadian auto company and the Russian bank.
GM chief negotiator John Smith reportedly had reservations about Magna’s offer because it will give its Russian partner access to GM intellectual property and control over some of its Chevrolet operations in Russia.
But Bloomberg reported that the entire new board, heavy with US administration appointees, is questioning the previous board’s decision to give up control of Opel.
German Chancellor Angela Merkel, who favours the winning bid, reportedly said on German television Sunday night that she was frustrated with the slow pace of the Opel deal.
“Every day counts, for the workers, as well as for the business situation,” she has been quoted as saying.
Under the deal, Magna and Sberbank will equally share a 55 percent stake in Opel and its UK unit Vauxhall. GM will retain 35 percent, and Opel employees acquire 10 percent.
But upset with GM’s dilly-dallying over clinching the deal, leaders of Opel’s 25,000 workers have reportedly gone back back an agreement to forego their vacation pay. Reports here say they are now seeking $108.1 million.
Being the majority stake holders in GM, the US government can have a decisive say in the bidding process. But White House deputy press secretary Bill Burton said Monday that President Barack Obama will not get in it.
“The president’s view is that decisions made on the day-to-day operations of General Motors should be made by the folks at General Motors. He never wanted to get into the auto business and he’s happy for them to make their decisions and get back on their feet,” said Burton said.
