BERLIN — Chancellor Angela Merkel said Wednesday that Germany's talks with General Motors Co. over the future of its Opel unit remained focused on Berlin's preferred bid, by Canadian auto-parts maker Magna.
But she softened her insistence that the deal be reached swiftly, saying substance - not speed - was paramount.
Merkel's government hopes to see Opel, including its British unit Vauxhall, sold to an investor group led by Magna International Inc., which includes Russian state-owned bank Sberbank. She said in a Wednesday interview with N24 TV that ongoing talks centered on that bid.
"We are negotiating with the Americans over questions that remain regarding Magna's offer," Merkel said.
The government has offered $6.5 billion in credit to support the Magna bid. It has not offered to help other investors, including Brussels, Belgium-based RHJ International SA.
Merkel's comments came a day after GM negotiator John Smith met with German representatives in Berlin.
The chancellor has been increasingly criticized for sticking so fiercely to Magna, which has promised to save the most jobs by keeping all of Opel's four German factories open.
Opel employs 25,000 people in Germany, about half of GM Europe's total work force, and German politicians have been keen to safeguard jobs ahead of national elections next month. The federal government's preference for Magna is shared by the four German state governments where Opel has plants.
GM's new board of directors last week balked at picking a bidder, reportedly over concerns that GM's small- and midsize-car technologies could be used by Russian automaker OAO GAZ to update its vehicles and compete with Chevrolet. GAZ has ties to Magna and Sberbank.
The chancellor had been lobbying heavily to push through a deal before Germans vote on a new government Sept. 27. She appeared to change that tack Wednesday, saying, "Substance has to come before speed."
Nevertheless, Merkel said she expected some developments in the negotiations by Sept. 8-9, when GM's management board is to meet. "Hopefully, by then at the latest, we will have moved ahead," she said.
In an interview with the Passauer Neue Presse daily, the director of the German Economic Institute, Michael Huether, accused the government of "making the gross error" of focusing all its attention only on one bidder.
Opposition leader Guido Westerwelle, whose Free Democrats are favored by Merkel as a coalition partner after Sept. 27 parliamentary elections, said the move "limits our scope for negotiation by pinning us down."
Under the terms of the deal being discussed, Magna and Sberbank would get a 55 percent stake in Opel while GM would hold on to a 35 percent stake. Opel workers would get 10 percent.
Adam Opel GmbH was transferred to a government-backed trust earlier this year that holds 65 percent of the automaker, with GM holding 35 percent.
Merkel also acknowledged that there remained fears that funding from either side of the Atlantic could flow across the ocean.
"Just as the Americans say, 'no money for Europe,' we also have put our fire wall - finances for Europe must stay in Europe," Merkel said.
Business, Pages 28 on 08/27/2009