What the Mail doesn’t disclose is whether Merkel has cleared such vast state aid with the EU Commission . Here it seems you have to get clearance from Brussels before blowing your nose.
But Germany has made up its mind and is chucking its weight about and to hell with everryone else - What Germany wants, Germany will get - it seems
Christina
DAILY MAIL 21.8.09
Mandelson blasts Merkel over bias in Vauxhall sell-off
By KARL WEST
Britain and Germany are at loggerheads over the battle for control of Vauxhall/Opel after business secretary Lord Mandelson accused German chancellor Angela Merkel of attempting to distort the outcome in Berlin's favour.
The car marques are being sold by Detroit giant General Motors as it seeks to return to a firmer financial footing after emerging from US bankruptcy.
Canadian car-parts group Magna and Belgian finance firm RHJ International are fighting it out for GM's European arm.
Britain vs Germany: who will control the Vauxhall/Opel operations?
Berlin has championed the Magna bid because it has given guarantees not to shut down German plants, while some GM executives favour RHJ.
Merkel has put huge pressure on GM's top brass by pledging as much as £3.9billion in state aid for Opel, which has 25,000 German workers, if GM chooses Magna over RHJ. This has infuriated Mandelson and trade union leaders who view RHJ as the better bet for Vauxhall's 5,000 workers.
RHJ has promised to retain Vauxhall's plants at Luton and Ellesmere Port in Cheshire. Mandelson said he expects GM's board to take an ' objective, commercial decision' about the future of Vauxhall and sister marque Opel.
He added: 'This decision, above all, needs to secure the long term viability of both Opel and Vauxhall in the UK and should not be distorted by political considerations in any one country.'
Unions are deeply concerned about the Magna proposal because it has given no long-term assurances about Vauxhall's plants. It has only said that 'no immediate plant closures are contemplated' in the UK.
Magna's bid partner, the Russian state-owned lender Sberbank, previously said it would sell its stake in Vauxhall/Opel to Russian van-maker Gaz, fuelling fears for the future of van production in Luton.
Magna and Sberbank plan to split a 55 per cent stake in GM Europe, with GM retaining 35 per cent and Opel workers holding 10 per cent. RHJ plans to take a 50.1 per cent stake in the business, with GM holding the rest.
The heads of Magna and Sberbank met yesterday for an 'informal chat' with GM chief Fritz Henderson in Detroit. Sources said GM's board intends to reveal its preferred bidder later today.
But a final decision is not expected until next week because trustees who oversee a majority stake in Opel - which was ringfenced and propped up with German aid in May to avoid being caught up in GM's bankruptcy - must approve any decision.
FINANCIAL TIMES
21.8.09
Magna in pole position for Opel decision
By Bernard Simon in Toronto, Daniel Schaefer in Frankfurt,and Jim Pickard in London
General Motors's board is set to choose a preferred bidder today for a controlling stake in Opel/Vauxhall amid intense pressure from the German government to favour Magna International, the Canadian parts maker.
The decision will be made amid growing disquiet over the sale process among other EU member states where the Detroit carmaker has operations.
The other governments, especially the UK, are concerned that the Germans will seek to call the shots in deciding which GM plants are closed or scaled back as the new owners work to put the unit on a more even financial keel.
Magna, backed by Russia's Sberbank, is competing against RHJ International, the Brussels-based private-equity group. Representatives of both bidders have discussed their offers with GM's senior management in Detroit during the past two days.
The carmaker has up to now leaned towards RHJ, fearing that Magna and Sberbank could siphon off Opel technology for the Russian car industry. Russia has become an increasingly important market for GM's Chevrolet brand.
However, one person close to the talks said yesterday GM "is being told [by the German government] that money is only available to Magna".
The federal government and various German states have agreed to put up the entire €4.5bn ($6.4bn) in credits needed to finance the deal.
Jochen Homann, the deputy economics minister, who also chairs the government's Opel task force, reiterated Germany's preference for Magna yesterday.
"We could envisage making a loan available, then later agreeing precisely how the costs are to be shared out with the other European countries," he said.
Both bidders have indicated they will cut GM Europe's workforce by a fifth, equal to about 10,000 jobs. But Magna would make most of the cuts outside Germany. GM would retain a minority stake.
Lord Mandelson, the British business secretary, made clear his discomfort with Germany as he insisted that any decision should not be "distorted by political considerations in any one country".
A UK government source added that it was a mistake for the German government to come out in favour of Magna because it would be harder for GM to negotiate the best terms.
Yet, both bidders have said they are committed to keeping the two UK plants open, although there are fears of potential job losses further down the line.
According to Paul Newton, analyst at HIS Global Insight, "as Germany's money appears to be the only option to provide Opel/Vauxhall with a viable future, precisely what 'decision' GM has to make seems academic. With elections coming next month in Germany, the government has made no secret that its support is reliant on its own national interests." Even so, GM's directors may balk at doing Germany's bidding.
The US and Canadian government's bought a 10 per cent stake in GM as part of its recent court-supervised restructuring and have nominated several members of the board.
GM's recommendation must be approved by the Opel trust, which holds a 65 per cent stake, and by a German government task force.
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