Page last updated at 10:15 GMT, Thursday, 28 May 2009 11:15 UK

Anger over Opel talks breakdown

By Tristana Moore
BBC News, Berlin

From right, German Finance Minister Peer Steinbrueck, German Economic Minister Karl-Theodor zu Guttenberg, and Roland Koch, prime minister of German Sstate Hesse, talk during a news conference in front of the Chancellery in Berlin
Finance Minister Peer Steinbrueck called GM's tactics "scandalous"

The expressions on their faces said it all.

As German ministers emerged from the marathon talks at about 0500, they all looked annoyed.

The aim of the discussions was to come up with a deal to secure the future of the carmaker Opel, but the talks broke down.

German ministers showed no hesitation in pointing the finger of blame at the Americans.

The German government said it was suddenly confronted with "new figures", a surprising demand for an extra 300m euros in financing from General Motors, and it was clear that the US government was not prepared to come to the rescue.

With Germany already poised to commit 1.5bn euros for an independent trust which would secure bridge financing for the carmaker Opel while negotiations with potential investors continue over the summer, the German government was not ready to commit money which could end up flowing to GM's coffers.

Finance Minister Peer Steinbrueck slammed what he called GM's "scandalous" negotiating tactics.

There was also a sense of irritation that the US government had sent an official from the Treasury to attend the meeting who was widely considered to be not the right man for such high-level discussions.

Deadline nears

German Chancellor Angela Merkel at late-night talks
Senior German ministers slammed GM's 'scandalous' tactics

There was one positive outcome. It seems that the field of bidders for Opel has now been narrowed down to the Italian carmaker Fiat and the Austrian-Canadian car-parts manufacturer Magna.

The US private equity investor Ripplewood is out of the race. As for the Chinese carmaker BAIC, because its bid was submitted so late, the offer is still being examined by German officials.

According to reports in the German media, Magna has improved its bid and there are rumours the Canadian-Austrian car-parts maker may be prepared to throw more money into the pot.

The clock is ticking. General Motors is expected to file for bankruptcy before 1 June, the deadline set by the US government, and Chancellor Merkel's government is determined to reach an agreement to secure Opel's long-term future before then.

Opel employs about 26,000 people in Germany and the future of the carmaker has become a cause celebre.

Another round of talks is planned on Friday. If there's no deal by then, in the worst-case scenario which the German Economy Minister Karl-Theodor zu Guttenberg has threatened, even Opel could go into insolvency.

For thousands of Opel workers, there's more uncertainty.



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