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GM rejects SolarWorld's takeover offer for Opel news
20 November 2008

Even as a German regional government approved 500 million ($631 million) in loan guarantees to automaker Opel, in case the parent company General Motors Corp (GM) goes bankrupt, there is a surprise in store for the beleaguered German auto maker.

SolarWorld, a German solar energy company, has revealed plans to bid for the German factories of Opel and GM's development center in Ruesselsheim.

Solarworld said it would provide 250 million euros in cash and 750 million euros in credit lines, pending government approval, to acquire Opel's four German factories and says it would turn Opel into Europe's first "green" car company.

SolarWorld says it plans to restructure the product range of Opel to offer in future electric and hybrid automobiles and the newest technology combining extended-range electric and combustion motors highly efficiently.

SolarWorld's offer is conditional on Opel completely separating from its US parent and on state guarantees from the German government.

The company said it would also seek compensation payments for each of Opel's German workers totalling 1 billion euros, matching the figure the car maker had said it would seek in state funding.

SolarWorld makes electricity generating solar panels and is smaller than GM by revenue. In the third quarter of 2008-09, SolarWorld earned euro36.1 million ($45.6 million) on sales of euro238.3 million ($301 million). GM lost $2.5 billion on revenue of $37.9 billion.

GM, which is itself nearly bankrupt and wants a multibillion dollar bailout from the U.S. government, has dismissed the takeover plan.

Karin Kirchner, a spokeswoman for GM Europe in Switzerland, said Opel was not for sale.
 
SolarWorld, meanwhile, said it acquired Royal Dutch Shell Plc's solar division two years ago for 100 million euros. It says it restructured those sites, which have since become profitable. SolarWorld says it has been working on solar-powered vehicles for many years. Asbeck, likened the crisis in the auto sector to an industrial revolution and said it would impact the entire auto industry in the West.

German politicians have also dismissed Solar World's plans as bizarre saying the government or GM would never provide billion euros to SolarWorld.

Opel employs about 25,000 workers in its German plants in Ruesselsheim, Bochum, Kaiserslautern and Eisenach. With federal election and a series of state votes drawing closer, some politicians have called for broader aid for auto companies.

The West German state of Hesse has cleared the way for providing aid to Opel and has empowered the state government to grant guarantees of up to 500 million euros to troubled firms.

German Chancellor Angela Merkel has said although Germany would mount a rescue plan for Opel it would be a special case and there would be no industry-wide rescue effort.

In Europe, including UK, automakers are asking for a broader plan to help the sector perceived to be a key industry that provides large scale employment and impacts other industries considerably.


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GM rejects SolarWorld's takeover offer for Opel