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Belgian regional chief warns of Opel protectionism

Published 07/24/2009, 09:12 AM
Updated 07/24/2009, 09:24 AM

By Philip Blenkinsop

BRUSSELS, July 24 (Reuters) - The European Commission and the German government must ensure the future of General Motors' European unit Opel is settled on economic merits not protectionist interests, a Belgian regional chief said.

Kris Peeters, premier of Belgian region Flanders, told a press conference on Friday that Flanders had learned on Thursday that the two remaining bidders for Opel both intended to "phase out" Opel's plant in the Belgian city of Antwerp.

These bidders are private equity firm RHJ International -- a Belgium-listed spin off from private equity group Ripplewood Holdings -- and a consortium of Magna and Sberbank.

Peeters said he wanted to establish what was meant by the term and whether there were alternatives.

"The second element is that there is the feeling that Magna's and Ripplewood's business plans are to maximise plants that are kept open in Germany," he said, adding this was because Germany was offering more state aid.

Flanders has offered a sale and leaseback deal worth a potential 200 million euros, and up to 300 million euros in loan guarantees if the Antwerp plant is kept open.

In Peeters' view, Opel Antwerp had many economic advantages and was, based on wage costs, productivity and other factors, at least as good as Opel in Bochum, Germany.

"The question then is why one should have a phasing out of Antwerp... This question we shall bring up today with the European Commission and the German government," he said.

"If everything goes in a certain direction, in the end the only hope will be for the European Commission to say that this dossier is not judged on its economic merits but has been carved up on political grounds," he added.

Peeters could not say whether other Opel plants outside Germany were destined for closure but believed some would be affected. Opel has sites in Britain, Poland and Spain.

The European Commission has said it would not open an investigation into any state aid that Opel bidders might receive until the German government presents a final plan.

GM and the German government, which is set to provide loan guarantees of up to 4.5 billion euros, are due to continue talks next week.

Germany, and the German states with Opel sites, have indicated a preference for Canadian auto supplier Magna, while GM likes the offer from RHJ.

If they disagree, the end game will play out in the Opel Trust, which holds 65 percent of Opel shares. (For a Factbox on what Opel's suitors have in mind, click on) (For questions and answers on the process for deciding Opel's fate, click on) (Reporting by Philip Blenkinsop) ($1=.7043 euro)

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