Germany could provide 4.5 billion euros ($6.35 billion) in state aid for carmaker Opel if General Motors chooses Canada's Magna, Berlin's favored suitor, as the buyer, a minister said.

The last-ditch offer would see the federal government and Germany states with Opel plants split the initial aid bill without waiting for other European countries that have GM sites to chip in, Deputy Economy Minister Jochen Homann said.

We could envisage making a loan available, then later agreeing precisely how the costs are to be shared out with the other European countries, Homann -- who heads the government's Opel task force -- told Reuters on Wednesday.

Others such as Britain, Spain, Poland and Belgium could contribute once the degree of their further involvement in GM's European operations, which employs some 50,000 in Europe, became clear.

Asked whether the offer to stump up the money would be extended to the Canadian automotive group Magna's rival bidder, Belgian financial group RHJ, Homann said: The question doesn't arise, because the German government has a preference for Magna's improved offer.


General Motors' board of directors convenes later on Friday and sources close to the deal said the meeting would address the sale of Opel.

It's possible that the GM board will review both offers on Friday and will give a recommendation, Homann said. The German government has clearly stated that it favors the Magna offer. There are no doubts from this perspective.

Homann said the federal government and the states expected Opel's suitor to invest 10 percent of the sum in Opel that Germany would make available for the carmaker.

That means Magna would have to bring in 450 million euros of its own capital, he said.

Asked whether he was confident that this could be agreed, Homann said: Yes.

RHJ said on Wednesday it had about 380 million euros ($535.9 million) available to invest at the end of July, a sum that had dipped 12.5 percent since end-March.

Sources close to the talks said the GM board aimed to recommend one of the suitors at the meeting.

Trustees who oversee a majority stake in Opel -- which was ringfenced and propped up with German aid in May to avoid being swept into GM's brief bankruptcy -- must approve any decision.

GM declined to comment.


German Chancellor Angela Merkel and the German states that are home to Opel plants have come out clearly in favor of the Magna offer because they think the Canadian automotive group's expertise can save more of the 25,000 Opel jobs in Germany.

RHJ's offer for Opel seeks less European state aid and has won favorable comments from some GM officials, but is viewed skeptically in Berlin and by Opel's top labor leaders.

Still, Opel labor is divided on which buyer to favor, with immediate concerns about jobs being the major factor.

We prefer the RHJ offer because it provides greater job guarantees for the Spanish plant, said a spokesman for the UGT union, Spain's largest, in Madrid. UGT fears 1,400 jobs in Zaragoza could go if RHJ wins but 1,700 if Magna prevails.

John Fetherston, head convener at the Ellesmere Port Vauxhall plant in Britain for trade union Unite, said the union had not backed a favorite but that a number of reports had suggested RHJ would be better for British plants.

GM's Vauxhall employs around 4,700 staff in Britain, including a site in Luton seen as especially at risk from cost-cutting.

Both Magna and RHJ plan to cut around 10,000 Opel jobs in Europe, or a fifth of the workforce.

Germany is set to get off relatively lightly, although RHJ has suggested idling the plant in Eisenach for two years. Magna wants to keep all four German plants in operation.

Rudi Kennes, deputy labor leader for Opel in Europe and a representative of Belgium's ABVV trade union, said any preference for RHJ was most emphatically not shared in Belgium.

If the Spanish still think the sun is turning around Spain...they're wrong, he said.

($1=.7091 Euro)

(Additional reporting by Phillip Halstrick, Angelika Gruber and Patricia Uhlig in Frankfurt, Robert Hetz in Madrid, Anne Jolis in Brussels, John Bowker in London and Rene Wagner in Berlin; Editing by Simon Jessop, John Stonestreet)