GM hits skids on European stake sale
TEXT OF STORY
Bob Moon: Meantime, GM’s plan to sell off a major stake in its European division has just hit the skids. Talks with the Canadian auto-parts maker Magna have stalled. Marketplace’s Stephen Beard has more on that from the European Desk in London.
STEPHEN BEARD: It looked like a done deal with Magna. The German government had given its blessing with implicit promises of cash. And the labor unions approved. But talks between GM and Magna have run into trouble.
Now GM is reported to be ready to sign a new outline agreement with a different bidder. Peter Wells of the Cardiff Business School says this is bad news all round.
PETER WELLS:A speedy resolution was always going to be preferable because otherwise they are simply losing money and every month that goes by the credibility of the new entity that emerges in Europe would be somewhat undermined.
A new bidder would have to be approved by the German government. With a general election looming, that decision is unlikely until the fall. That delay, says Wells, could drastically cut the value of GM Europe.
In London, this is Stephen Beard for Marketplace.
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