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GM’s Wagoner says deal in works to rescue Opel

GM’s Wagoner says deal in works to rescue Opel

Harry Stoffer

Automotive News | March 17, 2009 – 11:24 am EST


WASHINGTON — General Motors CEO Rick Wagoner said today he is encouraged by the willingness of European officials to provide aid to the automaker’s Opel subsidiary.

It’s a situation “that is literally developing as we speak,” Wagoner said here at a breakfast meeting with reporters organized by The Christian Science Monitor.

Fixing GM’s European troubles is part of the company’s effort to right itself globally, as it explained in a restructuring proposal to the U.S. government last month.

Wagoner met Monday evening with German Economy Minister Karl-Theodor zu Guttenberg at the German Embassy in Washington.

Details of any possible assistance are not final, Wagoner said. GM is prepared to have less than a 100 percent stake in an Opel spinoff, but more negotiations are needed to reduce costs in Europe, he said.

“We’re kind of open to a different structure in Europe,” he said.

Uncertainty is an undercurrent of almost all aspects of GM’s attempts to restructure with aid from the U.S. government, with concessions from the UAW and bondholders and possibly with assistance from overseas governments.

Skin in the game

“The dynamics are frustrating to everyone,” Wagoner said. But “all of it can come together very quickly,” he added.

It helps that “everybody’s got skin in the game,” he said.

But GM is struggling to finish a new deal with the UAW and to get bondholders to exchange debt for equity.

Despite the clouded horizon, Wagoner offered a modestly optimistic assessment of the work being done by an Obama administration task force. The group is reviewing restructuring plans from GM and Chrysler LLC and is considering more aid to the industry.

He said GM is in almost daily contact with the task force and determined that members are indeed working almost around the clock, judging by the times on some of the e-mails the company receives.

The task force faces a March 31 deadline for deciding on those plans and more aid.

No hard line on deadline?

But its leaders, particularly senior adviser Steven Rattner, have been sending signals, mainly in a round of media interviews, that the administration may not take a hard line on the deadline.

Terms of loan agreements established by the former Bush administration would require that loans made so far be recalled immediately if conditions are not met.

That now appears unlikely.

Wagoner said the task force is “well informed” of the precarious situation of the supplier community and appears ready to provide some support soon.

GM and Chrysler have received $17.4 billion in federal loans and seek up to $21.6 billion more. Suppliers say they need up to $18.5 billion.

  Wagoner: “Everybody’s got skin in the game.”


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