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| Beijing Auto submitted offer for Opel, says GM |
| Bloomberg / Jul 05, 2009, 00:49 IST |
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General Motors Corp said Beijing Automotive Industry Holding Co. submitted an offer for its Opel division, giving the bankrupt US auto maker more options in the event negotiations with Magna International Inc fail.
Beijing Automotive made the non-binding proposal after examining Opel’s books, Chris Preuss, a GM spokesman in Zurich, said, declining to provide details. The Chinese company’s bid is being reviewed, he said, adding that talks with Aurora, Ontario-based Magna remain “on track.”
Magna, Canada’s biggest auto-parts manufacturer, was chosen in May by the German government as the preferred bidder for Opel, which has its headquarters in the Frankfurt suburb of Ruesselsheim. Progress has been slowed by disagreements over rights to use Detroit-based GM’s technology and engineering designs, people familiar with the talks have said.
“The deal is unlikely to help Beijing Auto substantially unless the company buys designs and brings them back to China,” Zhang Xin, an automobile analyst at Guotai Junan Securities Co. in Beijing, said on Saturday. SAIC Motor Corp, China’s largest car maker and the Chinese partner of General Motors, bought the design rights to MG Rover Group Ltd’s Rover 25 and 75 models for $116 million in 2005.
The UK, where Opel owns two factories making vehicles under the Vauxhall brand, may lend money to help complete the sale to Magna, Business Secretary Peter Mandelson said yesterday. “We are prepared to financially underwrite that deal,” Mandelson told reporters after meeting business, political and labor officials at Vauxhall’s factory in Luton, England. Potential government aid would include loans and loan guarantees “for which we have to have interest paid and some securities.”
GM is selling a majority of Opel as part of a global reorganisation that includes the bankruptcy of its US operations, closing or idling 15 factories in that country and cutting thousands of salaried and union jobs to return to profit.
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