Germany Presses U.S. On GM's Sale of Opel

Obama Does Not Want to Intervene

The Obama administration has insisted that while General Motors is now government-owned, it will not be government-run.

But as the automaker considers a deal to sell its Opel brand in Europe, the German government has been pressing the United States to intervene in the company's decision.

Chancellor Angela Merkel wants the United States and GM to make a final decision on an on-again, off-again agreement to sell Opel to an investor group led by Magna, a Canadian auto-parts maker. The German government aims to preserve the company, a major employer in the country, and has agreed to help finance the deal.

"We are negotiating with the Americans over questions that remain regarding Magna's offer," Merkel said Wednesday in an interview with N24 TV.

The pressure from a major Western ally highlights the tricky balance the administration faces as it seeks to avoid meddling with the operations of a company that is 60 percent government-owned.

The president's autos task force has regular talks with GM regarding the Opel sale, but the nature of those discussions has not been disclosed.

"The president's view is that decisions made on the day-to-day operations of General Motors should be made by the folks at General Motors," White House spokesman Bill Burton said earlier this week. "He never wanted to get into the auto business, and he's happy for them to make their decisions and get back on their feet."

Opel has about 25,000 workers in Germany, and Merkel faces a national election next month. On Saturday, German Foreign Minister Frank-Walter Steinmeier called U.S. Secretary of State Hillary Rodham Clinton, and they discussed the proposed sale.

Clinton agreed to "communicate the German government's position within the U.S. administration," the German ministry said.

The negotiations center on an agreement, struck earlier this year, under which GM would sell Opel to Magna and a Russian business.

On Friday, however, GM's new board balked at the deal and directed GM chief executive Fritz Henderson to consider other options, according to people familiar with the board's discussions. Among those other options are a possible sale of Opel to RHJ International, a Belgian private equity group, or for GM to hold on to Opel. The people spoke on the condition of anonymity because the negotiations are ongoing.

Industry analysts said that while retaining Opel might cost GM billions of dollars, it could be a very attractive possibility because Opel has important engineering facilities and gives GM some standing in Europe.