Crunch time for Vauxhall/Opel

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General Motors Europe is speaking to industrial groups, sovereign wealth funds and banks which are interested in buying a stake in Opel/Vauxhall, company sources said Friday.

An unnamed source told Automotive News Europe that GM Europe wants to identify preferred investors in the next two to three weeks.

More than six groups have contacted GM Europe about taking a stake in the company but GM would prefer commercial banks to buy a stake because they can move quicker than companies or wealth funds, company sources said.

GM is seeking 3.3 billion euros ($4.4 billion) in loans and financial guarantees from European governments where it has manufacturing operations to provide liquidity to survive until 2011.

Germany’s Chancellor Angela Merkel this week pledged to find a solution for Opel, but she said that any state action would more likely be in the form of loan guarantees than a direct stake in the German carmaker.

German-based Opel and British sister brand Vauxhall could run out of money in the coming months unless European governments or investors provide a cash injection and in a stark warning a company source familiar with the negotiations said that If funding is not secured, the consequences would likely be a “dramatic” loss of jobs and factory closures.

Source: Automotive News