Fearful of job cuts, Germany urges GM to decide Opel's fate

With the national election only five weeks away, German politicians are stepping up the pressure on General Motors to choose a candidate to take over its troubled Opel subsidiary.

German Chancellor Angela Merkel said she expected progress over the issue within the next week, after GM on Friday postponed its long-awaited decision regarding Opel.

"I regret that a final decision wasn't made, but I hope it will happen soon, because both for the workers and the economic situation at Opel, we urgently need a decision," Merkel told German public television in an interview to be aired on Sunday, Aug. 23.

General Motors, which emerged from bankruptcy in July and is now majority-owned by the US government, has two takeover offers on the table - one from Canadian auto parts maker Magna International with backing from Russian state bank Sberbank, and another from the Brussels-based investment group RHJ International.

The German government has offered substantial financial backing for Magna's bid, which it sees as the best option to save jobs at Opel. Both Magna and RHJ plan to cut around 10,000 jobs across Europe but Berlin hopes that with Magna fewer jobs would be lost within Germany.

German Foreign Minister Frank-Walter Steinmeier has contacted US Secretary of State Hillary Clinton to press Berlin's case. Steinmeier said in a statement that he had "emphasized that after several months of intensive negotiations, the time had now come for a decision."

"The workers at Opel deserve clarity and a credible prospect for the future," he said, calling for a decision "that safeguards the future of all Opel factories and as many jobs in Germany as possible."

<SNIP>http://www.dw-world.de/dw/article/0,,4592914,00.html