- The Washington Times - Tuesday, May 26, 2009

BERLIN — Chancellor Angela Merkel said Monday that Germany aims to loosen European unit Opel’s ties with troubled parent General Motors Corp. ahead of a possible Chapter 11 bankruptcy filing by GM.

Mrs. Merkel, whose government is examining three rival bids for German-based Adam Opel GmbH, indicated that decisions on Opel’s future will have to be made by midweek.

The government says it is up to GM and the U.S. administration to choose an investor, while Germany will decide whether and how to lend financial support.

Opel employs about 25,000 people in Germany, nearly half GM Europe’s total work force. With elections looming in September, Berlin is eager to save as many jobs as it can.

“What we do not want is to end up in a situation where we practically become appendages of … possible Chapter 11 proceedings or something similar,” Mrs. Merkel said at a news conference.

“The German interest lies in having the separation and legal aspects done before that,” she added.

U.S. parent GM faces a June 1 deadline to restructure or file for bankruptcy.

Germany has pledged bridge financing to keep Opel running; it likely will have to support a new owner with hefty loan guarantees, and wants to ensure that taxpayers’ money does not get drawn into U.S. bankruptcy proceedings.

Mrs. Merkel said any solution needs to ensure “that our money does not flow to America and American money does not flow to Germany.”

Officials have suggested putting a legally independent Opel in the hands of a trustee while negotiations with investors continue.

The three Opel bids come from Italian carmaker Fiat SpA; a consortium of Canadian auto parts maker Magna International Inc. and state-controlled Russian lender Sberbank; and New York-based buyout firm Ripplewood Holdings LLC.

Mrs. Merkel said details of the bids are changing “day by day.”

Her spokesman, Ulrich Wilhelm, said Mrs. Merkel discussed Opel by phone Saturday with Russian Prime Minister Vladimir Putin and met Sunday with Magna managers.

Mr. Wilhelm also said Merkel plans to meet with Fiat Chief Executive Officer Sergio Marchionne in the first half of this week, but did not say exactly when.

Germany’s Tagesspiegel daily reported, without citing sources, that Mrs. Merkel plans a meeting at the chancellery Wednesday with the bidders’ CEOs, U.S. government representatives and governors of the four German states that have Opel plants.

The government would not confirm that, saying only that consultations would continue this week.

Several German politicians have indicated that they prefer Magna’s bid. Fiat has sought to allay fears that its offer - which foresees wrapping Opel into a global powerhouse also including Chrysler LLC - would mean drastic job cuts.

In comments published Sunday, Economy Minister Karl-Theodor zu Guttenberg said all three bids still have shortcomings and an Opel bankruptcy filing might be a better option.

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