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UPDATE 2-GM Europe says investor response on Opel promising

Published: 30 Mar 2009 17:16:50 PST

* GM Europe says gets positive response to investor search

* Says GM's problems won't impact European restructuring

* Labour leader supports new GM CEO Henderson

* Hesse premier reaffirms state not the better entrepreneur (Adds statements by GM Europe, Hesse premier Koch)

BERLIN/WIESBADEN, Germany, March 30 - GM Europe said it had so far seen a positive response to its search for an investor and told the market that the latest bad news at its U.S. parent would not affect its restructuring.

President Barack Obama's administration on Monday rejected turnaround plans submitted by both GM and Chrysler and forced out GM's Chief Executive Rick Wagoner.

GM Europe has said it will need an outside investor to push through a proposed rescue plan, though there have not yet been any serious public declarations of interest.

"Initial outreach to third-party investors has been promising, but GM Europe must achieve its benchmarks for labor restructuring and liquidity as soon as possible," GM Europe said in a statement published on its website on Monday.

Meanwhile, Wagoner's ouster was generally seen as a positive move for the rescue of GM's German carmaker Opel in Germany.

"The move was overdue," senior Opel labour leader Klaus Franz told Reuters on Monday, welcoming Fritz Henderson, head of operations and former GM Europe president, as new CEO of GM.

Henderson, who oversaw a sweeping restructuring of Opel years ago that resulted in thousands of job cuts when he was head of GM Europe, made a clear push for a carve-out of GM's German brand, according to the Opel works council boss and member of its supervisory board.

The state premier for Hessen, where Opel is headquartered, said on Monday he was "firmly convinced" investors could be found who were willing to buy a stake with the backing of the state and Washington's assurance that GM will survive.

But he distanced himself from comments by rival politicians in the state of Rheinland-Palatinate that the state should take a direct stake in Opel to secure jobs in the local Kaiserslautern plant.

"We need private investors that are convinced that if they put money into it, that it's not entirely lost in several years time but is still there and brings a return. If the entire world says no, then it is difficult for the state to believe that it is the better entrepreneur," Roland Koch told a news conference.

The conservative Christian Democrat conceded that the news did represent a delay that resulted in the uncertainty of two more months without a conclusive answer from Washington and could potentially threaten confidence in Opel on the part of employees, customers and parts suppliers.

Bernstein analyst Max Warburton said the U.S. decision to grant a 60-day extension to GM to finish work on a restructuring plan should not directly change much for Opel, as its fate rested ultimately with politicians in Europe and Berlin, but there was a real danger that it would encourage delay.

Comments from Berlin's economics minister, Karl-Theodor zu Guttenberg, that the 60-day extension should be used "to optimise and to clarify" whether Opel fulfils the criteria for state aid, highlighted that danger.

"This gives the German government another excuse to procrastinate and wait to see what the U.S. plan looks like, but Opel may run out of capital in the meantime," Warburton said.

The government scrappage bonus -- which pays people to scrap cars at least nine years old, if they buy a new one -- has boosted orders for Opel cars, and German politicians have pointed out this gives it more time before it runs out of cash.


Source: Reuters

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