GM's European dealers consider stake in Vauxhall/Opel

Vauxhall and Opel dealers have reportedly said they are ready to invest Euros 500m in GM's European operations in return for a 10-15 per cent stake in the company once the Detroit giant finds a buyer for its subsidiary.

According to the Financial Times Euroda, Vauxhall and Opel's European dealer association, is preparing to talk to the German government and potential bidders about its proposal which would be financed on a Euro 150 levy on every car sold over the next three years.

If the deal is accepted this would be the first time a dealer network has taken a stake in a car brand.
According to the FT GM is keen to choose a partner by the end of this month when it is expected to follow Chrysler and apply for Chapter 11 bankruptcy protection.

GM currently has around 4,000 European dealers operating in 25 countries.

Last week the German government confirmed it was talking to Fiat and Magna, the international automotive component supplier, and had asked for detailed proposals by 20 May.

The FT also reported that a number of private equity firms have also expressed an interested in the business.

Meanwhile, in the US GM has reportedly told 1,124 dealers their franchise agreements will not be extended beyond October 2010. Dealers can appeal agains the decision. GM plans to slash its US dealership network from 5,969 to 3,600 sites as part of its turnaround package.

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