Germany OK with GM Keeping Opel

With Magna buying Opel still an uncertain scenario, Germany might approve GM's plan B - the US-based manufacturer might keep the company and start restructuring using government money. According to a report by Reuters, the German government might agree with General Motors keeping Opel but it's still unclear whether the officials are ready to approve the same loan package for the US manufacturer as for the Canadian - Austrian partsmaker.

"The new government will take another look at decisions made up to now on Opel and imminent conditions to be set by the European Commission," Opel Trust member Dirk Pfeil told the Frankfurter Allgemeine Zeitung according to the aforementioned source. "The result could be a solution where Opel stays completely within the General Motors group," added Pfeil.

Meanwhile, negotiations with the involved parties continue and GM's board will meet on November 3 to discuss the latest changes in Magna's takeover proposal.

"In the meantime, work will continue to resolve remaining open points with the Magna/Sberbank proposal—for example, related to labor cost reductions and the government-backed financing package — to document the related understandings, and complete all preparations for the signing of binding agreements should that be authorized by GM’s Board at the November 3 meeting," John Smith, GM Group Vice President Corporate Planning and Alliances (and GM’s chief negotiator for the sale of a stake in Opel/Vauxhall), said in a statement last week.

Under the terms of the deal, Magna International would take control of a 55 percent stake in Opel, together with Russian partner Sberbank. GM would retain 35 percent of the company while the remaining 10 percent would go to Opel's employees.