Germany seeks to patch up growing divisions over Opel deal

BERLIN (Reuters) – Germany’s Economy Minister sought to shore up support for his government’s rescue plans for Opel amid signs of growing opposition at home and abroad to the Berlin-brokered deal with Canadian automotive firm Magna .

“I will be talking to my Spanish (counterpart) this afternoon,” Economy Minister Karl-Theodor zu Guttenberg told reporters in Berlin. “We will continue to co-operate closely on this just as we have in the last few months.”

Guttenberg’s remarks come after Spain and Britain both voiced opposition to Magna’s plan to buy 55 percent of Opel from General Motors.

Domestic headwinds for the deal are also growing, with the market-liberal Free Democrats (FDP) — in talks to form a new government with Chancellor Angela Merkel’s conservatives — raising concerns about it.

The Spanish government said Spain’s Industry Minister Miguel Sebastian would not attend a meeting called by Germany on Friday to discuss Opel because it was unhappy about Magna’s bid.

However, Sebastian is expected to attend a meeting with Magna’s chief executive Siegfried Wolf, his ministry said.

Separately, Business Secretary Peter Mandelson said he would not back the Magna deal in its current form.

SLICING UP THE FUNDING PIE

In order to push through the deal, Germany offered to stump up 4.5 billion euros (4.2 billion pounds) in guarantees for Opel, saying it would agree later on how this sum was split between countries with plants — which include Poland and Belgium as well as Britain and Spain.

Around half of Opel’s 50,000 European jobs are in Germany.

Magna and its Russian partner Sberbank have vowed to inject 500 million euros into Opel, which they want to use to make an aggressive push into the Russian market.

They plan to cut around 10,000 European jobs, a quarter of those in Germany, but have committed to keeping all the German plants running. Opel’s Antwerp plant in Belgium and UK manufacturing sites of sister brand Vauxhall are seen to be at risk.

Spain has told Germany it cannot support Magna’s current plans for the carmaker, according to German media reports, and doubts within Germany have resurfaced.

Deputy FDP leader Rainer Bruederle criticised the plans on Friday, and said he wanted to bring up the matter with conservatives in negotiations over the incoming coalition.

“My fears are gradually being realised that nothing has been properly worked out on this,” he told reporters.

Spain has voiced its discontent but has said it would back a solution that guaranteed the future of Opel’s Zaragoza plant.

China Ministry of Commerce approves GM Delphi deal

SHANGHAI, Sept 29 (Reuters) – China’s Ministry of Commerce has approved plans by General Motors Co [GM.UL] to acquire certain assets of bankrupt Delphi Corp (DPHIQ.PK), Xinhua, the country’s official news agency, reported on Tuesday.
The approval came late on Monday and had conditions attached, including a ban on GM and Delphi on exchanging trade secrets on Delphi’s other Chinese customers.

GM is purchasing Delphi’s global steering business and four of the parts supplier’s plants it used to own in New York and Indiana.

Delphi hopes to exit bankruptcy at month’s end under control of its lenders, which have agreed to forgive nearly $3.5 billion in debt.

GM will assume more than $1 billion in Delphi obligations and waive $2 billion in claims. The automaker also plans to invest $1.75 billion and provide Delphi with loans.

A New York bankruptcy judge approved the Delphi sale in July, and a regulatory review continues.

Delphi has been in bankruptcy since 2005.