European Commissioner Guenter Verheugen says approval of Magna's deal for GM Europe won't be automatic. The rescue plan has to be viable
The European Commission wants to go over buyout plans for struggling carmaker Opel with a fine-toothed comb, says industry commissioner Guenter Verheugen, who insists the company must be competitive in the future.
Any plan must: "truly offer assurances that the business will survive and will be competitive for a length of time," Mr. Verheugen says in an article in German newspapaer Die Welt on Monday (15 June).
"The European Commission cannot allow such a plan to pass automatically, it must examine it from top to bottom."
The German government announced late last month that that Canadian car parts supplier Magna (MGA) and Russia's Sberbank had won preferred bidder status in negotiations to buy out the European subsidiaries of bankrupt American car giant General Motors.
Under the deal??hat includes ??1.5 billion of bridge financing from the German government with more loans to come??M would keep 35 percent of the company, Opel workers would retain 10 percent, Magna would hold 20 percent, and Russia's state-owned Sberbank would take on 35 percent.
Mr. Verheugen points out that external interest in Opel has so far been dependent on public aid, with the current proposed deal of most benefit to the Russians he feels.
"The only ones who incur a relatively low risk by participating in General Motors Europe are the Russians," he says. "They are going to gain access to more modern technologies and can then build up their own automobile industry, suitable for exports."
In Italy over the weekend for a meeting between the Group of Eight most industrialized countries, both Russian and Canadian finance ministers signaled their support for the plan said German finance minister Peer Steinbrueck.
"Both have made it clear that they welcome the solution model and they will be helpful as much as possible," Mr. Steinbrueck said.
Despite handing preferred bidder status to Canadian company Magna last month, the German government says it is still in discussions with other interested parties, including Italy's Fiat (FIA.MI).
Elections on the horizon
The question of state aid has become increasingly pertinent in Germany as the country's Social Democrat foreign minister Frank-Walter Steinmeier has increasingly sought to label himself as a defender of jobs leading up to national elections on 27 September.
German Chancellor Angela Merkel??hose Christian Democrat party has ruled alongside the Social Democrats in a grand coalition since the last elections??ecently rebuffed calls by Mr. Steinmeier to bailout German retailer Arcandor AG.
"Where a company has a real perspective and it makes sense to save it, then that's what we stand for," Mr. Steinmeier told a Social Democratic Party convention in Berlin on Sunday.
"It's better to finance employment than unemployment," he added.