Cash-strapped US auto major General Motors may offload a majority stake in Opel, its main European division, to private investors amidst choked credit market and the threat of bankruptcy, its new chief executive has said.
General Motors, which is seeking €3.3 billion of loans or guarantees from European governments, including about €2.5 billion from Germany, is reported to have now mandated Commerzbank to help find a new investor for its Opel unit, amidst booming demand for its cars.
While government funds are yet to come, Commerzbank has identified some parties interested in acquiring a stake in Opel, a Financial Times report quoted Fritz Henderson, chief executive of General Motors, as saying. (See: GM's new chief optimistic on steering the company to health)
Henderson declined to identifying the party, but said the sale could make GM a minority stakeholder in Opel.
He said the company expects some 120,000 orders in the first quarter of 2009, but warned it could run out of cash next month and may not be able to sustain its operations on the continent under the present tight money conditions.
The order boost comes from a package the German state offers as part of its fight against slumping world auto sales. The government is paying owners 2,500 euros ($3,351) to scrap old cars if they replace them with a new model.
Opel is said to have received some 80,000 orders for its new flagship Insignia model, with 18,000 coming directly from Germany.
Opel is seeing its best result in the last 10 years, reports quoting Michael Klaus, executive director for sales, marketing and aftersales at Adam Opel GmbH, said.
Henderson blamed the carmarker's creditors and unions for their failure to extend the much need support. Bankruptcy could "very well happen" unless stakeholders agree to an aggressive restructuring plan, the report quoted him as saying.
"If you have any doubts still, then listen to me: we're going to get the job done one way or the other and I think therefore people who were maybe sitting back and saying well that won't happen - it may happen."
Henderson, a GM veteran, was appointed chief executive after the Treasury's auto taskforce asked Rick Wagoner to step down a week ago.
Henderson, who took charge at GM early this month, has time till 1 June to persuade unsecured creditors to allow restructuring of at least a fraction of the $27 billion (€20.1 billion) GM owed.