Though it's still short of bankruptcy, the parting out of General Motors' corporate structure is underway, and the latest word has Fiat and Magna emerging as rivals over a majority stake in Opel. The gang over at Motor Authority have dug up word from several German officials that shows a clear preference for Magna as a suitor to the Russelsheim-based company, however.
As you're sure to know by now, GM is looking to sell off a stake in Opel to prove its dedication to the company to the German government. In return for that show of faith, the Germans are expected to produce billions in loans to help prop up the company, since its continued existence is of key importance to labor, government and industry officials.
Some of those officials have come out in opposition to a Fiat investment in Opel because they fear the Italian company would enact sweeping layoffs and cutbacks that would further damage the German car industry and economy, according to Motor Authority. Fiat has countered with promises to build the Punto in Opel's Eisenach plant and to keep other Opel plants open, but the promises have fallen on deaf ears.
In contrast, Magna, with the aid of Russian businessman Oleg Deripaska, is perceived as a stabilizing force. The duo is reportedly seeking a 50% interest in Opel, but GM may have some problems of its own with that arrangement. GM favors a single bidder rather than a combination. Of course, GM will have to consider not just the present, but also the future of Opel, especially since it says it wants to retain a substantial stake in the company. However, GM has also in the past day said it might be interested in selling all of Opel.
Whatever the outcome, it won't be decided until sometime next month. "These discussions continue as we speak through April and will continue into early May," said GM CEO Fritz Henderson in a news conference Monday.--Nelson Ireson