GM advisers said to suggest retaining Opel ownership

[rickaren]

GM advisers said to suggest retaining Opel ownership

Posted Monday, Aug 24, 2009, 11:38 am in Employee News

General Motors Co. advisers are recommending the board consider spurning a German-backed sale of its Opel unit to retain a bigger presence in Europe and Russia, a person familiar with the discussions told Bloomberg.

The advisers suggest that GM seek aid from other European governments to retain ownership of Opel as an alternative to surrendering control to a group led by Canada’s Magna International Inc. or to Brussels-based RHJ International SA the person, who asked not to be identified because the talks aren’t public, told Bloomberg.

GM’s new board, dominated by members appointed after the Obama administration forced the company into bankruptcy, is questioning the decision made by previous directors to give up control of the unit to save it, the news service said. The delay is a setback for German Chancellor Angela Merkel who is pressing for a quick resolution to the matter, the story said.

Opel has enough cash to operate well into the fourth quarter without new loans, people familiar with the unit’s finances told the news service. GM’s new 13-member board held meetings on Aug. 4 and Aug. 21 without an Opel decision, Bloomberg said. The next board meeting isn’t scheduled until September, the people said.

Opel’s position has improved as a government incentive for motorists boosted new-vehicle sales in Europe, similar to the U.S. “cash for clunkers” program, the story said. Rising sales in Europe have allowed Opel to operate past when it had been forecast to run out of cash.(Bloomberg)