Fiat chief Sergio Marchionne jetted back to Germany on Tuesday for an eleventh-hour attempt to win over a sceptical Chancellor Angela Merkel to his bid for General Motors' Opel unit. With signs that Berlin and GM prefer a Russian-backed bid from Canada's Magna, Marchionne met Merkel and Economy Minister Karl-Theodor zu Guttenberg for around an hour, reportedly after talks Monday in Detroit with GM.
It was the latest in an intense flurry of meetings as the German government strives to choose its preferred bidder on Wednesday "well before" a possible bankruptcy filing by GM, Merkel's spokesman said on Monday. John Elkann, the representative of the Agnelli family, Fiat's founders and controlling shareholders, was also in town, meeting zu Guttenberg separately.
The final decision on which of the three bids - a third is from Brussels-based RHJ, backed by US private equity firm Ripplewood - for a stake in GM's European operations will win lies with GM and the US government. Germany, where GM has most of its European factories and employees, is prepared to offer billions of euros (dollars) in loan guarantees to stop Opel's 25,000 German employees losing their jobs four months before elections.
GM, which also owns Vauxhall in Britain and Saab in Sweden, is working against a June 1 deadline to come up with restructuring measures that will convince the US Treasury to keep it afloat with billions of dollars in taxpayers' money.
If it cannot, the Detroit giant will follow Chrysler into bankruptcy. Zu Guttenberg over the weekend raised the possibility of letting Opel file for insolvency as well but the government has stressed that this is a last resort and that they would prefer to find an investor.
Merkel will hold a crunch final meeting on Wednesday, running late into the night if necessary, that will include representatives from GM and the three bidders, sources told AFP. Marchionne wants to combine GM's European and Latin American operations with Chrysler, in which it has secured a 20-percent stake, to create the world's second largest automaker. He has said Fiat would cut 10,000 jobs if his bid is successful, including just 2,000 in Germany and no plant closures.
Canadian auto parts giant Magna has teamed up with Russia's top bank, state-controlled Sberbank, for a bid that would see precious metals tycoon Oleg Deripaska's truck company GAZ making Opel vehicles in Russia. Brussels-based RHJ International, the third bidder, owns stakes in auto parts firms including Niles and Asehi in Japan, Belgium's Honsel, as well as Columbia Music Entertainment.
Magna, which already assembles Saab, BMW and Mercedes vehicles under licence and which offered to buy Chrysler from Daimler in 2007, is seen as favourite in Berlin and Detroit but talks are ongoing with all three bidders. To finance its bid, Magna has arranged for a possible four-billion-euro (5.6-billion-dollar) loan from German lender Commerzbank, sources told Dow Jones Newswires. Italy's number two bank, Intesa Sanpaolo, said Tuesday it was ready to back Fiat.
German Chancellor Angela Merkel spoke by phone to Russian Prime Minister Vladimir Putin on Saturday about Magna's offer and on Sunday talked with the firm's owner, Frank Stronach, and chief executive Siegfried Wolf. Magna and RHJ were due to present on Tuesday their plans to employee representatives at Opel's main Ruesselsheim factory near Frankfurt, Rainer Einenkel, head of the works council from another factory, Bochum, told AFP.