Germany Hopeful Despite EU Concerns Over Opel

German government said it was hopeful of overcoming European Union worries about General Motors' deal to sell its Opel subsidiary to a Canadian-Russian consortium.

BERLIN (AP) -- The German government said Monday it was hopeful of overcoming European Union worries about General Motors Corp.'s deal to sell its Opel subsidiary to a Canadian-Russian consortium, and argued that there was no need to review the bidding process.

EU Competition Commissioner Neelie Kroes last week voiced concern over Germany's plans to provide euro4.5 billion ($6.7 billion) to support the takeover of Opel by Canadian auto parts maker Magna International Inc. and Russian lender Sberbank.

She said there were indications that Germany made the aid conditional on the Magna-Sberbank consortium being chosen over rival bidder RHJ. She suggested General Motors Co. be allowed to reconsider the deal -- with reassurances that aid is available for any investor.

The German government favored Magna as the bidder likely to shed fewer jobs in restructuring Opel.

Chancellor Angela Merkel's spokesman, Ulrich Wilhelm, said that "there is no reason to call into question previous decisions."

Germany believes a repeat of the decision process "is in no way necessary," he added.

The Economy Ministry has written to GM and the interim trust overseeing Opel, asking them to clarify how decisions were taken, ministry spokesman Felix Probst said. Opel was placed in trust to keep it out of GM's bankruptcy restructuring later this year.

Probst said GM and Opel trust responses would be forwarded to the European Commission. "It is in the interest of all the parties that we achieve a clarification and solution as soon as possible," he said.

Probst said Germany does not expect "fundamental problems" to arise, because the bidding process was devoted "exclusively to commercial factors."

General Motors would not comment.

Ferdinand Dudenhoeffer, an auto industry expert at the University of Duisburg-Essen, said he expected Berlin would overcome Brussels' concerns.

"A delay -- or prevention -- of the Opel sale to Magna-Sberbank would bring with it very great economic damage," he said. "Opel would not survive unraveling the package again and beginning the process from scratch."

EU spokesman Jonathan Todd welcomed Germany's sending the letters. He said "the ball is now in the court of the companies" whether to stick with the Magna deal, find another buyer or keep the company under GM's ownership.

The Magna-Sberbank consortium last month beat out a rival bid for Opel by Brussels-based investment firm RHJ International. The deal would see the consortium take a 55-percent stake in Opel, with GM keeping 35 percent and 10 percent going to employees.

The sale has yet to be completed. Belgium, where Opel's Antwerp factory faces likely closure, urged the European Commission to investigate the deal amid concern that Germany may have sought to protect its own plants at the cost of others.

Besides concerns from Brussels, the prospective new owners need to agree with employee representatives on cost cuts and restructuring to return the unit to profit.

On Monday, Spanish labor representative Jose Juan Arceiz said unions had rejected as "insufficient" Magna's latest offer concerning the future of Opel's Zaragoza plant. He said the workers' committee will meet Tuesday to vote on holding protests that could include a strike.

The Opel plant in Zaragoza employs 7,500 people. Magna has said it wants to lay off 1,350 workers and shift part of the factory's production to Germany.

Opel and sister brand Vauxhall employ some 49,000 people in Europe -- about half of them in Germany -- and have plants in countries including Spain, Poland and Britain.

Magna has said some 10,500 jobs could be cut overall, 4,500 of them in Germany, where all four Opel plants would remain open.

Talks involving Opel workers in Germany continue. Chief worker representative Klaus Franz said over the weekend that Kroes' letter to Germany has "no effect on the ongoing negotiations."

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