GM willing to keep stake in European business

GENERAL Motors is interested in retaining a minority stake in its restructured European operations and plans to have a framework for a deal to sell the division by the end of the month.

“We’re speaking with multiple bidders with the objective to at least have some understanding of what an agreement would look like,” GM chief executive Fritz Henderson said on a conference call, referring to its European operations. “And our target is do it slightly before the end of this month.”

Italian carmaker Fiat, which has agreed to take a stake in Chrysler, has emerged as one of the key bidders for GM’s European operations. Fiat aims to merge its car business with GM European brands, Opel, Vauxhall and Saab, as well as its South American and South African operations, according to a presentation obtained by Reuters. Magna International, an Austrian-Canadian car parts manufacturer, has also expressed interest in Opel.

GM said that, while it is looking for a buyer, it is willing to retain a stake in the operations.

GM Europe has said it needs to cut costs by $1.2 (€880m) billion to return German brand Opel to profit by 2011. It has also said it needs €3.3 billion in state aid from European governments to avert job cuts and site closures.

“With respect to the German government, we have a need for funding actually in our European business that is important and urgent,” Fritz said.

“We’re going make sure that any partner we pick for the business would be suitable for them.

GM, operating with US government aid, has until June 1 to reach deals to slash debt owed to bondholders and the United Auto Workers union and to win concessions from the union to cut operating costs under terms set by the Obama administration’s car task force.