Page last updated at 15:42 GMT, Sunday, 24 May 2009 16:42 UK

Fiat improves bid for GM's Opel

Karl-Theodor zu Guttenberg
Karl-Theodor zu Guttenberg said Fiat has a "willingness to negotiate further"

Italian carmaker Fiat has improved its bid to buy Opel and its UK brand Vauxhall from General Motors.

Germany's Economy Minister Karl-Theodor zu Guttenberg said that Fiat had provided more detail about capital contributions and risk-sharing.

German government officials are currently discussing at least three rival bids, submitted before Wednesday's deadline.

Fiat said it would cut fewer than 10,000 jobs if its bid succeeds.

Three bidders

Rival bidders include Canadian car parts maker Magna and RHJ International, a Brussels-based investment firm.

The Italian carmaker said last week the cuts would be made across Opel's Europe-wide operations, which currently employ about 50,000.

Italian carmaker Fiat, which has already warned it would likely close one of Opel's four German factories if its bid is successful
Magna - Canadian car parts firm which has pledged not to close any of the German Opel plants
RHJ International, a Brussels-based investment firm that owns car parts suppliers

"Interestingly, Fiat has improved its offer once again and we've received a more thorough blueprint from them in the last few hours," Mr zu Guttenberg said on Saturday. "We're sensing a willingness to negotiate further from all sides."

But on Sunday, Mr zu Guttenberg warned that none of the bids were guaranteed to succeed.

"We must first have a high degree of certainty that the significant tax money we will have to provide is not lost," he told the Bild am Sonntag newspaper. "From my point of view, none of the three offers so far provides this certainty in a sufficient way."

Jobs concern

The improved offer by Fiat came after as more German politicians threw their weight behind Magna's bid.

Magna, in partnership with Russia bank Sberbank, has vowed to keep open all four German Opel plants. Fiat has already warned that it would be likely to close one Opel factory in Germany, an engine plant at Kaiserslautern.

The final say for the offer lies with US giant GM, but the German government has agreed to provide aid for any deal and so its view will influence any outcome.

"Under our concept the German sites are seen as assets and we want to keep as many jobs as possible," said Magna co-chief executive Siegfried Wolf.

Roland Koch, the premier of Opel's home state of Hesse, said the Magna offer was "closest to the hopes and wishes" of German politicians and the country's Opel workers.

And German Foreign Minister Frank-Walter Steinmeier described the Magna bid as the only "sustainable" plan among the three.

GM is aiming to sell Opel ahead of a 1 June US government deadline to restructure its finances or face bankruptcy protection. GM is also looking to sell Sweden-based Saab, its other European car business.

Meanwhile, Italian Prime Minister Silvio Berlusconi said on Saturday that he feels Germany is not giving any preferential treatment to Fiat.

"I can say that the German government is being totally impartial in the Fiat-Opel case," he said in an Italian television interview.

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