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Opel Rescue Talks Stall

Discussion in 'Forex Daily News & Outlook' started by godoftrading, May 28, 2009.

  1. godoftrading

    godoftrading New Member

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    May 28 (Bloomberg) -- Negotiators in Berlin working through the night failed to finalize the rescue of General Motors Corp.’s Opel unit after the U.S. automaker demanded an extra 300 million euros ($415 million) in cash.

    The talks at German Chancellor Angela Merkel’s offices, which included members of her Cabinet and state-level officials, a representative of the U.S, Treasury and corporate executives, narrowed the bidders to Fiat SpA and Magna International Inc. as they haggled over terms. The government hopes to reach a solution by tomorrow, German Economy Minister Karl-Theodor zu Guttenberg told reporters at 4:30 a.m. in Berlin.

    “This was a bizarre night” said Guttenberg. “The talks were turned upside down by GM’s unexpected demands. We do not have the assurances we need in order to extend a bridge loan.”

    Detroit-based GM, facing a potential bankruptcy filing, asked for immediate cash assistance from the German government to keep Opel operating. Merkel, seeking re-election on Sept. 27, is under pressure from lawmakers and labor unions to save 25,000 German Opel jobs.

    “We had a nasty surprise when this demand turned up literally at 8 p.m.,” an hour before the talks started, said German Finance Minister Peer Steinbrueck. “We did consider this a bit of an outrage.”

    http://www.bloomberg.com/apps/news?pid=20601087&sid=arO7EMKYHwV8&refer=home

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