GM keen to hold onto Vauxhall and Opel

General Motors (GM) is attempting to come up with a plan that will allow it to keep control of its European operations halting the sale of Open and Vauxhall according to a report in the Times.

The paper quotes industry sources as saying the GM is trying to raise $4.3 billion of finance from the governments of the United States and other European countries, including Britain.

Fritz Henderson, GM chief executive, is reportedly preparing a proposal for the company’s next board meeting early next month after it failed to announce a winning bid for Opel and Vauxhall last Friday.

GM has received two offers for its European business:

Magna International, a Canadian car parts supplier, has teamed up with Russian bank, Sberbank, to make an offer for GM’s European business, with the help of as much as €4.5 billion (£3.9 billion) in German loan guarantees.

RHJ International, the Belgian-based investment group, has made a rival offer thought to be favoured by Unite, the union representing Vauxhall’s 5,000 workers. It believes that RHJ’s offer would spread job losses more evenly between Britain and Germany.

It has been suggested that GM’s refreshed board, which has seven new members, may be less keen to sell its European business now the company is in a better financial position than in March when the sale was first proposed.

The US Government has a 60.8 per cent stake in GM after the carmaker’s bankruptcy and bailout this year.