Top Opel manager warns of cash crisis

The top manager at struggling German carmaker Opel warned yesterday it could run out of cash within three months unless a deal to sell it off to the Canadian group Magna goes ahead quickly.

Opel "only has liquidity until mid-January 2010, that means the decision must be made as quickly as possible," Fred Irwin, head of the Opel Trust which now manages the carmaker, told Deutschlandfunk radio.

Opel's parent company, the US automaker General Motors, is expected this week to sign a deal selling a 55-per cent stake in Opel, which includes Vauxhall in Britain, to Magna and the state-owned Russian bank Sberbank.

But on Friday, the European Commission voiced serious doubts about whether German aid to help the deal succeed conformed to European Union competition regulations.

Berlin, keen to protect as many of the 25,000 Opel jobs in Germany as possible, has offered up to €4.5 billion in state aid.

A German governnment spokesman said on Monday that he did not expect the EU to throw up "fundamental" problems for the sale.

"It is not in Opel Trust's interest to re-launch the bidding process," Mr Irwin added yesterday. GM's management board "should meet today (Tuesday) or tomorrow" and consider the matter in a pragmatic manner, he said.

About half of Opel and its sister brand Vauxhall's workforce is located in Germany, with the rest in other countries including Belgium, Britain, Poland and Spain.