Berlin - Giant US carmaker General Motors Co (GM) is expected to end Thursday months of uncertainty surrounding the company's ailing European offshoot Opel by announcing its decision on the future ownership of the group. After a two-day meeting in Detroit, the GM's board dispatched company Vice President John Smith to Berlin to tell both the Opel workers and the German government its decision on Opel, which also has operations in Poland, Spain as well as Belgium and includes Britain's Vauxhall brand.
However, about half of Opel's 50,000-strong workforce is based in Germany and the company is currently being propped up by a 1.5- billion-euro (2.2-billion-dollar) bridging loan from Berlin.
With about 25,000 jobs at stake, the board's decision comes at a critical time for Chancellor Angela Merkel, who is facing an election in less than three weeks.
Speculation is mounting that the US carmaker has rejected Merkel's preferred option of a consortium led by Austrian-Canadian auto parts group Magna International taking out a majority stake in Opel.
Instead media reports point to the possibility of GM retaining control or a dominant role in Opel or hiving off a majority holding to the Brussels-based private equity group RHJ International. Another possible option is thought to be to declare Opel insolvent.
A move to retain Opel raises the prospects of GM being forced to repay the 1.5 billion euro loan to the German Government. Berlin has already said it expects GM to repay the loan if it decides to remain in control of Opel.
German Opel unions have warned that a decision by GM to retain Opel would result in protests by workers because of the threat to jobs.
RHJ International recently raised its offer for a 50.1-per-cent stake in what has been described as the New Opel by 25 million euros to 300 million euros in cash.
However, if GM decided to sell a majority stake in Opel to one of the two bidders the final decision on the future ownership structure of its European operations rests with a German Government-backed trust. which currently oversees the day-to-day affairs of the auto group.
The trust would not be consulted if GM opted to retain control of the Opel.
Either way, the speculation about the GM's decision has helped to fuel fears about big jobs cuts at Opel across Europe, in particular at its German plants.
In line with calculations made by Opel's German trade unions, the international financial advisory group KPMG told the GM board in a report it would need up to 6.1 billion dollars to retain its European subsidiary.
Plunging car sales resulted in GM launching earlier this year a major restructuring of its global operations, including selling off of a majority stake in Opel.
But since then, the carmaker has emerged from bankruptcy and a new GM board has been appointed. Also, there are signs the economic crisis has abated for the global car industry and the world economy in general.
Moreover, the shift in the global market to smaller more energy efficient cars adds to the appeal for GM of retaining a controlling stake in Opel and the technology backing up its compact European car models.
Ahead of the Opel announcement, GM unveiled a major management restructuring which includes its chief financial officer Ray Young departing the automaker.
