Germany drops opposition to RHJ's Opel bid: Report

BERLIN: The German government has dropped its opposition to General Motors selling its Opel unit to investment group RHJ following pressure from the US auto giant, a newspaper report said on Wednesday.

Until now, Chancellor Angela Merkel's government has offered state aid only to support a bid from Canadian auto parts maker Magna and Russian state-owned lender Sberbank while GM is thought to prefer RHJ.

But following a meeting on Tuesday between GM negotiator John Smith and Jochen Homann, head of Berlin's "Opel Task Force" and deputy economy minister, the government is now ready to consider RHJ, the Bild daily reported.

The Brussels-based investment group would have to team up with a strategic partner in the auto industry, however, Bild reported, without saying where it got the information.

Around half of Opel's 50,000 workers are in Germany -- where elections take place on September 27 -- and Berlin believes that Magna and Sberbank would cut fewer jobs in Germany than RHJ.

A GM board meeting on Friday failed to choose a buyer, causing irritation and impatience in Germany, and subsequent press reports have said that GM was trying to develop a financing plan to allow it to hold on to Opel.

German Economy Minister Karl-Theodor zu Guttenberg said late on Tuesday that he believed GM still wanted to sell.

"The message that we have received from the firm's management is that they still want to continue looking for an investor," zu Guttenberg told ZDF television.