Magna appeared to move into pole position to buy a large stake in General Motors’ European operations after the German economics minister praised a takeover plan by the Canadian car parts supplier.

Karl-Theodor zu Guttenberg joined in the chorus of politicians and trade unionists who have hailed the car parts maker’s investment concept for GM’s German and British marques Opel and Vauxhall.

After a meeting with senior representatives from Magna, he called it a “first interesting, rough plan”.

The comments are important because any investor will need government backing to obtain up to €3.3bn ($4.3bn) in state guarantees.

Opel and Vauxhall have attracted up to seven suitors and GM aims to finalise the sales process in the coming weeks.

Mr Guttenberg’s words came amid growing resistance in Germany against a rival takeover approach from Italian carmaker Fiat.

Politicians and trade unions have voiced concerns as they fret that Fiat would cut jobs or close plants in areas where the two carmakers’ operations overlap.

However, when quizzed about Opel last week, Sergio Marchionne, Fiat’s chief executive, said there were “other ways” to cut capacity, such as decreasing production volumes, rather than closing plants.

Mr Guttenberg on Tuesday provided another blow to Fiat’s approach when he said the carmaker’s plan lacked sufficient figures. He also called on GM to provide more information on Opel.

His words highlighted how Opel’s fate has increasingly become subjected to party politics in a year of federal elections in Germany.

Frank-Walter Steinmeier, the top social democratic candidate for September’s elections, also met Magna executives over the weekend.

Car industry insiders said the government had been trying to set its own agenda with Fiat and Magna without much consultation of Opel’s management. Fiat said it had not held any direct talks with Opel.

Magna’s own auto parts and vehicle assembly operations, including its Austrian Magna Steyr unit, have been hit hard by the global industry downturn and resulting loss of orders.

The Canadian company reported a net loss of $148m in the fourth quarter of last year, compared with a profit of $28m a year ago.

However, Frank Stronach, Magna’s chairman, has long been interested in moving his company further into full assembly of vehicles.

Magna was an unsuccessful bidder for Chrysler in the 2007 deal in which the US carmaker was sold to Cerberus Capital Management for $7.4bn.

Chrysler, which is now in the midst of a US government-led restructuring, is expected this week to sign a partnership to share technology and manufacturing with Fiat.

Fritz Henderson, GM’s chief executive, raised the possibility this week that the carmaker might exclude its overseas operations from a Chapter 11 filing.

Get alerts on Automobiles when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article