AFTER TALKS THAT stretched into the early hours of Saturday morning, the German Government has selected Canadian parts manufacturer Magna as its preferred bidder in the battle for GM Europe subsidiary Opel.
As part of the deal, Berlin will provide an immediate loan facility of 1.5 billion euros (AU$2.65b) to shore up Magna?s bid, with the company itself intending to put more than 500 million euros into Opel.
"A solution has been found to keep Opel running," said Peer Steinbrueck, German Finance Minister, outside the Chancellery at 2:00am after six hours of talks between the German and US Governments and representatives from GM and Magna.
Magna?s bid is also backed by Russian bank Sberbank, along with truck firm Gaz, owned by Russian businessman Oleg Deripaska, with the hope of expanding Opel and GM?s reach into Russia.
Mr Steinbrueck said the deal will ensure the security of Opel?s plants and offices in Germany, keeping most of Opel?s 25,000 employees in work. Magna has said, however, that it plans to cut 2500 jobs ? about 10 percent of Opel?s workforce - in Germany.
Italian manufacturer Fiat, one of the competing bidders for Opel and an earlier front-runner, said the German Government requests for extra funding were "unreasonable", also said it would cut 10,000 jobs if successful in its bid.
Full details of the plan have not been revealed, but it is believed that GM will hold onto 35 percent of its formerly wholly-owned subsidiary, while 10 percent would go to Opel employees.
UK Business Secretary Lord Mandelson, who spent much of last week lobbying potential bidders to keep existing UK-based production going, said that Magna had given a ?clear commitment? to continuing Opel and Vauxhall?s UK commitments.
The future of Vauxhall, which employs 5000 people at its Ellesmere Port and Luton plants in the UK, remains less than certain however.