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| Magna is 'very close' to GM deal | Magna is 'very close' to GM deal |
| (10 minutes later) | |
| Canadian car parts maker Magna International is the preferred bidder for GM Europe, owner of Opel and Vauxhall, Lord Mandelson has said. | Canadian car parts maker Magna International is the preferred bidder for GM Europe, owner of Opel and Vauxhall, Lord Mandelson has said. |
| The UK business secretary said a deal between Magna and GM was very near. | The UK business secretary said a deal between Magna and GM was very near. |
| He was speaking after reports that Magna had reached an agreement in principle to rescue GM Europe. | |
| The other potential bidder, Fiat, did not attend Friday's talks with the German government, saying Berlin's position was "unreasonable". | The other potential bidder, Fiat, did not attend Friday's talks with the German government, saying Berlin's position was "unreasonable". |
| GM in the US is expected to declare Chapter 11 bankruptcy on Monday. | GM in the US is expected to declare Chapter 11 bankruptcy on Monday. |
| Ministers meet | |
| A meeting is underway in Berlin - attended by Chancellor Angela Merkel, other German ministers and officials from the German states that contain GM plants - to discuss whether to approve the offer from Magna. | |
| While GM will ultimately choose who buys Opel and Vauxhall, the German government's preference is key because Berlin has pledged the most financial support for the eventual buyer. About half of GM Europe's 50,000 workers are employed in Germany. | While GM will ultimately choose who buys Opel and Vauxhall, the German government's preference is key because Berlin has pledged the most financial support for the eventual buyer. About half of GM Europe's 50,000 workers are employed in Germany. |
| They made it absolutely clear they would be committed to continued production by Vauxhall in the UK Lord Mandelson | |
| Magna's willingness to put forward bridging finance put them in a better position than Fiat, Lord Mandelson said. The Italian carmaker felt that the request for additional funds was unreasonable. | |
| The BBC's correspondent in Berlin, Tristana Moore, stressed that the deal was not complete. | |
| German officials continued to examine the offer and it was not yet clear if Fiat had pulled out altogether, she said. | |
| UK jobs | |
| Speaking to the BBC, Lord Mandelson said that after Magna tabled its offer, they came to London for a meeting. | Speaking to the BBC, Lord Mandelson said that after Magna tabled its offer, they came to London for a meeting. |
| "They made it absolutely clear they would be committed to continued production by Vauxhall in the UK," he said. | "They made it absolutely clear they would be committed to continued production by Vauxhall in the UK," he said. |
| "I will be seeking a very early meeting to reinforce that commitment." | "I will be seeking a very early meeting to reinforce that commitment." |
| Asked about what the deal means for jobs in the UK, he said: "It looks as if GM in Europe can be saved, it can be turned around. | Asked about what the deal means for jobs in the UK, he said: "It looks as if GM in Europe can be saved, it can be turned around. |
| See GM production centres in EuropeEnlarge Map | |
| "Of course it will involve change, there is excess capacity." | "Of course it will involve change, there is excess capacity." |
| Magna's plans | Magna's plans |
| Magna has said it will inject between 500m and 700m euros into Opel, assuming the deal gains government approval. | Magna has said it will inject between 500m and 700m euros into Opel, assuming the deal gains government approval. |
| It also plans to cut 2,500 jobs in Germany, about 10% of Opel's workforce in that country. Fiat had said it would cut 10,000 jobs. | It also plans to cut 2,500 jobs in Germany, about 10% of Opel's workforce in that country. Fiat had said it would cut 10,000 jobs. |
| Under the agreement with Magna, GM would keep a 35% stake in the company, while 10% would be owned by Opel employees. | Under the agreement with Magna, GM would keep a 35% stake in the company, while 10% would be owned by Opel employees. |
| Magna's bid is backed by Russia's state-run Sberbank and Oleg Deripaska's truck firm Gaz. It hopes that GM Europe will gain 20% of the Russian market in the short term. | Magna's bid is backed by Russia's state-run Sberbank and Oleg Deripaska's truck firm Gaz. It hopes that GM Europe will gain 20% of the Russian market in the short term. |
| Extra funding | Extra funding |
| There have been suggestions in the German media that it may be cheaper for the German government to allow GM Europe to declare itself insolvent than to allow it to be bought. | There have been suggestions in the German media that it may be cheaper for the German government to allow GM Europe to declare itself insolvent than to allow it to be bought. |
| On Thursday, the German government criticised the US Treasury and General Motors after being told at the last minute that GM Europe would need another 300m euros ($415m; £260m) in short-term funding. | On Thursday, the German government criticised the US Treasury and General Motors after being told at the last minute that GM Europe would need another 300m euros ($415m; £260m) in short-term funding. |
| It has already offered almost 1.4bn euros in loan guarantees. | It has already offered almost 1.4bn euros in loan guarantees. |
| Magna and GM will also have to make sure that GM Europe is restructured in a way that will protect the carmaker if, as expected, its parent company in the US declares itself bankrupt. | Magna and GM will also have to make sure that GM Europe is restructured in a way that will protect the carmaker if, as expected, its parent company in the US declares itself bankrupt. |