General Motors Co. should hurry up and sell its Adam Opel GmbH unit to Magna International Inc.: That is
the message coming from German Chancellor Angela Merkel.
She was explicit on the hurry-up part when she spoke on German TV over the weekend, Andrew Bulkeley reports on
The Deal Pipeline (subscription required). Meanwhile the impression that German authorities greatly prefer the bid from Magna was reinforced by reports that the GM board had to review the final bids without information on financial support that the German government would provide for the rival proposal from private equity-backed RHJ International SA.
Considering that John Smith, the GM executive leading the negotiations, has said that the offer from RHJ would be
easier for GM to implement, that was doubtless frustrating for GM chairman Ed Whitacre and the rest of the board.
So, perhaps, is the political pressure that the Germans are now trying to bring to bear on government-owned GM. Bulkeley also reports that in a phone conversation the German foreign minister told U.S. Secretary of State Hillary Clinton that it's time for a decision.
The State Department might seem a strange channel for a request that ultimately must go to Treasury, which is where the Automotive Task Force -- which has vowed to let GM make its own decisions on this and other matters -- resides. But whether it's simply protocol, a search for a sympathetic ear, or a reminder that Germany will view GM's decision in the broader context of U.S.-German relations, it adds to the pressure.
All of which adds interest to Bloomberg's Monday morning
report that GM's advisers are recommending the company consider finding a way to retain Opel. As the article points out, the decision to sell a majority of Opel was made by the previous board, prior to GM's radical restructuring while in bankruptcy.
The business case for scrapping the sale -- based largely on prospects for Opel in the Russian market, the ultimate source of GM's discomfort with the bid from Magna and its Russian partners -- is not hard to make. Now it's starting to look as if the decision to keep Opel could also be a solution to a political impasse. -
Kenneth Klee
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