Global Biz

GM considering selling Opel again: reports

(Agencies)
Updated: 2011-06-09 21:54

File photo of a flag of General Motors (GM) flying next to an Opel logo at the Opel plant in Bochum August 25, 2009. [Photo/Agencies]

FRANKFURT - General Motors is considering putting Opel up for sale again as management is losing confidence that the European arm will return to profitability, two German magazines reported.

Auto Bild and Spiegel Online reported on Thursday, without citing any sources, that possible buyers could be Chinese carmakers or Germany's Volkswagen, which has almost 20 billion euros ($29.3 billion) available to spend.

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General Motors declined to comment on the reports. Opel also declined to comment, but its Chief Executive Karl-Friedrich Stracke called them "pure speculation" in a letter sent to employees.

GM dropped plans to spin off Opel in 2009 after months of negotiations to sell it, and embarked on a drastic restructuring to get the unit, which lost $1.6 billion last year, back on track.

GM's Chief Executive Dan Akerson said in March that Opel was still losing money despite selling more cars.

Stracke said in the letter to employees, which was seen by Reuters, that Opel was making very good progress.

"Incoming orders are very good right now. For the factories in Ellesmere Port and Gliwice we have already added eight shifts to meet demand for the Astra," Stracke said in the letter.

The reports come less than three months after Stracke was appointed as CEO of Opel, replacing Nick Reilly, who had led Opel when it was on the auction block.

At the time, analysts said Stracke faced an uphill battle as the mature Western European market was bringing up the rear in the global auto industry's slow march to recovery.

Volkswagen declined to comment on the reports.

The works council of Opel also said the reports that GM was considering a sale of Opel were "pure speculation" and called on the parent company to deny them.

GM had so far "kept Opel as it might otherwise lose technology and for other good reasons," Klaus Franz, head of the works council, said in a statement.

The German states of North Rhine-Westphalia and Thuringia, which are home to two of Opel's four plants in the country, brushed off the reports.

"According to our information, that is nonsense," a spokesman for Thuringia's economy ministry said.