Europe called for clarity on crisis-hit carmaker GM's plans for assets in the region with a German minister saying insolvency could be an option for Opel, while the Continental board met on Friday to discuss Schaeffler. As carmakers worldwide battle a sales slump, debate continued over the future of General Motors' European assets, with attention focusing on German brand Opel. German Interior Minister Wolfgang Schaeuble said that insolvency could be an option for Opel.
The public perception is that insolvency is associated with going bust or bankruptcy. But that is wrong. We must grasp that to survive such a crisis, modern insolvency rules are a better solution than the state taking a stake, he said in a newspaper interview on Friday.
GM Europe submitted a rescue plan for Opel last week, under which the German unit along with UK-based Vauxhall Motors would be partly spun off from its parent. It said the independent unit would need 3.3 billion euros ($4.17 billion) in state aid.
German Economy Minister Karl-Theoor zu Guttenberg met with executives from Opel and GM in Berlin on Friday and said it will take several weeks to decide whether to grant state aid. GM has also called on other European governments to provide support for its activities.
The European Union's executive on Thursday called for a meeting of member states affected by GM, saying the ailing carmaker was not informing the bloc about its problems.
Meanwhile, automotive supplier Continental was expected to make a statement later in the day, after its board met to discuss its future with major shareholder Schaeffler.
Schaeffler has a direct stake of almost 50 percent in Continental and transferred another 40 percent stake to banks to ensure it remains a minority shareholder under a deal it struck last year to end a bitter takeover row.
Germany's Robert Bosch said on Friday it was not in talks to buy part or all of indebted parts manufacturer Schaeffler after a newspaper report said it had signaled interest in Schaeffler's profitable industrial business.
In a further sign of the turbulence affecting automotive suppliers as demand for new cars plummets, at least three major tire makers canceled long-term contracts to buy Indonesian rubber.
Dealers said that SMPT, the rubber purchasing arm of Michelin, Yokohama Rubber and Continental AG told suppliers they had to abandon the contracts.
And U.S. parts maker BorgWarner Inc said it would suspend its 12 cents-per-share quarterly dividend to maintain financial flexibility while the economy remains mired in a slump.
Elsewhere, Japan's Mitsubishi Motors Corp has slashed production at its Thai plant by 60 percent and is delaying planned production of an eco car that was due to begin in late 2010.
And South Korea's number two automaker Kia Motors Corp said it planned to issue 400 billion won ($384.3 million) worth of three-year bonds with warrants to shore up its balance sheet amid the global credit squeeze.
German newspaper Sueddeutsche Zeitung reported that France's PSA Peugeot Citroen was in talks to extend its engine partnership with Germany's BMW.
(Reporting by Paul Carrel, Lewa Pardomuan, Risa Maeda, Viparat Jantraprap, Cheon Jong-woo, Rhee So-eui, Braden Reddall, Huw Jones, Pete Harrison and Ralf Banser; editing by Elaine Hardcastle)