General Motors may make clear, within the next 24 hours, whether it wants to keep its European carmaker Opel rather than sell it, a German labor representative said on Tuesday.
Armin Schild, IG Metall's leader in the state of Hesse where Opel has its headquarters, said the fact that GM's options for Opel had come to light ahead of an official announcement could mean that they were under serious consideration.
I see that as a bad sign for the future of Opel, he told German television station ZDF.
Sources told Reuters on Monday that GM was considering a plan to raise $4 billion to keep Opel rather than selling the unit to Canadian automotive group Magna International .
At a board meeting on Friday, GM directors declined to endorse a sale of Opel to Magna, or rival bidder Brussels-based investment firm RHJ International , sending the automaker back into negotiations this week with the German government.
The development comes against a backdrop of escalating labor tension and political pressure over GM's slow-moving effort to sell control of Opel and British sister brand Vauxhall.
Talks to sell Opel have lasted for months and have become a political hot potato ahead of German elections in September because of the state support involved and the thousands of job cuts expected to follow any sale.
German Chancellor Angela Merkel and German states think Magna would can save more jobs at Opel.
In Germany, Opel employs over 25,000 people in four major plants making everything from three-door Corsa subcompacts to Zafira vans. In the U.K., there are two key factories that produce automobiles under the Vauxhall badge. Opel has other facilities in Belgium, Poland and Spain.
Opel and its sister brand Vauxhall sold just over 560,000 cars in Europe in the first half of the year for a market share of 7.6 percent, according to data compiled by the ACEA auto industry association.
The Obama administration pledged on Monday to stay out of GM's choice of a buyer for Opel, while union leaders in Germany put more pressure on the U.S. automaker to make a decision.
Because GM is barred from using funding from the U.S. government to support its international operations, one of the options could include raising money by selling or mortgaging the automaker's assets in China, one of the sources said.
Berlin and the German states that host Opel plants have made clear they want Magna to get Opel and are set to provide 4.5 billion euros ($6.4 billion) in state aid to make it happen.
Germany has already provided 1.5 billion euros in bridge financing for Opel. As a result, German trustees overseeing a majority stake in Opel have to approve any deal after it clears the GM board.
(Reporting by Nadine Schimroszik; Writing by Maria Sheahan; Editing by Erica Billingham)