Washington - General Motors' board Tuesday was weighing its final decision on whether to sell a majority share of Opel to the Canadian car parts manufacturer Magna, as last minute questions surfaced about whether there had been political pressure on the deal. One of the last barriers to the deal appeared to have been cleared earlier in the day, as Opel employees in Russelsheim, Germany, agreed to forfeit 265 million euros (390 million dollars) in salary annually if Magna took over operations.
In exchange, they would receive a 10-per-cent share option in the new Magna-operated company.
But a last minute development could derail the Magna deal.
Last week, the European Union raised questions about whether Berlin had used undue political pressure to sway GM away from a bid from Belgium-based RHJ International Inc - the buyer favoured by GM and reportedly also by the US government - and towards the Magna offer.
Germany has pledged 4.5 billion euros (6.8 billion dollars) to support the deal, in the apparent hope of preserving jobs in Germany. The EU's competition regulators were concerned that the aid was made conditional on Magna's acquiring the majority holding in Opel.
The comments out of Brussels prompted a flurry of responses and reawakened a debate between Berlin and Washington over the best fate for Opel.
Until late August, GM was openly weighing keeping Opel for itself or selling it to RHJ, which represented less of a threat in terms of technology transfer to one of Magna's Russian partners, the Russian car maker Gaz.
GM needs Opel's modern, high petrol mileage cars. "They don't want to lose that, and they don't want others to have it," David Cole, chairman of the Michigan-based Center for Automotive Research, said recently.
After the EU regulators challenged Germany on the issue of political arm-twisting for Magna, Germany's Economics Minister Karl- Theodor zu Guttenberg wrote a quick letter of reassurance to GM saying that Berlin's financial support for Opel was not solely for the Magna-led bid.
That letter appeared to have revived other options for GM, whose top negotiator on Opel, John Smith, said the board would consider the "changes" reflected in zu Guttenberg's letter at Tuesday's meeting. That could mean they could look to Berlin to also support an RHJ deal.
In disposing of some of Opel, GM would hive off a 55-per-cent stake. The Magna consortium also includes the Russian bank Sberbank.
The US government has bailed GM out of bankruptcy with the pledge of 50 billion dollars in exchange for 60-per-cent ownership, and says officially that the Opel decision is up to GM. But Washington also has strong unofficial influence on GM after it insisted on a change of top management as part of the bailout.
According to The Wall Street Journal, board members were being asked by the GM management team on Tuesday to approve the contents of a letter that would put to rest EU regulators' concerns.
The letter would be addressed to the German government saying that a decision for Magna was the most economically sensible option for Opel - a letter clearly aimed at reassuring EU regulators.
A separate option would be for GM to retain ownership of Opel, media reports have said.
European Union regulators have set a November 27 deadline for their approval of Magna takeover.
About half of Opel's 50,000-strong workforce is in Germany. The car producer is at present existing on a 1.5-billion-euro bridging loan from the German government.
Last week, Magna reached an agreement with Spanish trade unions on the deal, based on the premise that it would acquire Opel, which also has operations in Belgium, Poland and Britain.
