Vauxhall faces grim future as German ministers fall out

Berlin could put Opel unit into trusteeship if American parent files for bankruptcy

The future of General Motors’ European subsidiaries, including its Vahuxhall plants at Ellesmere Port and Luton and Opel factories in Germany, was thrown into confusion when a German minister floated the possibility that none of the bids on the table for the business might succeed.



A week before its American parent company has to either raise cash by selling the European operations or file for bankruptcy, Karl-Theodor zu Guttenberg, the economic affairs minister, told Bild am Sonntag newspaper: “We now have three offers for an Opel takeover, but that doesn’t mean one of them will automatically come to fruition.

“We must first have a high degree of certainty that the significant tax money we will have to provide is not lost. None of the three offers so far provides this certainty in a sufficient way.” He added: “If these deficits were to remain, an orderly insolvency would clearly be the better solution – it also could open opportunities for the future of Opel.”

Bids have been tabled by the Fiat group, the Canadian car parts maker Magna International, in partnership with Russia’s Sberbank bank, and the New York-based private equity investor Ripplewood Holdings LLC. But the German government could instead put the Opel unit into a trusteeship if GM files for bankruptcy, and this week organized a €1.5bn bridging finance package to keep Opel running.

Such a solution would be extremely messy, as it would mean separate administration procedures throughout the EU, and supplier agreements in receivership to keep the closely integrated businesses running. GM Europe has major manufacturing operations in Germany, Spain, Britain, Sweden, Belgium, Poland and Hungary.

Mr Guttenberg’s remarks come ahead of a crucial meeting on Friday, convened by the German Chancellor AngelaMerkel , where regional ministers from the federal government will evaluate the three bids.

Germany’s ruling coalition of the Christian Democratic Union (CDU) and the Social Democratic Party (SPD) is divided over which bid to favour, with CDU members such as MrGuttenberg said to favour the Fiat bid or allowing GM Europe to go onto bankruptcy. But many senior SPD figures, who are traditionally closer to the trades unions, tend to sympathise with Magna International’s offer, because it has pledged to keep open all GM plants in Germany. Frank-Walter Steinmeier, the foreign minister and SPD candidate for the chancellorship in this year’s elections, hit back at Mr Guttenberg, yesterday, saying: “I advise everybody finally to stop the talk about an Opel insolvency. We should focus all our energy on saving as many jobs as possible at Opel instead of raising new spectres.”

Over the weekend, Fiat chief executive Sergio Marchionne said that “in the worst case, a maximum of 2,000 jobs inGermanywould be affected” by the planned integration. The implication there is that the UK operations, especially the Vauxhall van factory at Luton, will bear the brunt of the pain.

GMEurope is a complex operation. Indeed, despite Opel’s dominance, GM’s Spanish subsidiary makes almost as many vehicles and the UK is GM’s strongest market in Europe.

Separate talks about the sale of Saab of Sweden are also proceeding. There is speculation that GM could even keep itsVauxhall arm, integrating it instead with its US and Korean factories, to spearhead a new GM Europe. In any case, disentangling the legal ownership of GM’s various patents, brands and facilities could take many months.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss