General Motors' chief negotiator in the sale of Opel will on Tuesday meet a task force created by the German government to discuss the U.S. carmaker's plans for the European unit, a German politician said.

Germany's deputy Chancellor Frank Walter Steinmeier said on the sidelines of an event in Essen, Germany, that he hoped some points could be cleared up in the talks with John Smith.

German politicians and labor were flummoxed on Monday by news that GM may be considering keeping Opel rather than selling it to an investor, as planned.

Sources with knowledge of the deliberations had told Reuters on Monday that GM was considering a plan to raise $4 billion to keep Opel rather than selling it to one of two bidders -- Canada's Magna or RHJ.

GM decided earlier this year to spin off Opel, its unit for most of the past 80 years, saying it needed billions of euros in state aid to avert job cuts and site closures.

The possible reversal of that plan comes amid escalating labor tension and political pressure over GM's slow-moving effort to sell control of Opel and British affiliate Vauxhall.

Talks to sell Opel have gone on 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.

Steinmeier, a social democrat who will face Chancellor Angela Merkel in the federal elections, said he expects GM to stick with plans to sell Opel to an investor.

Merkel and German states have been putting pressure on GM to pick Magna's offer, made together with Russian partner Sberbank, because they think Magna would save more jobs.

In Germany, Opel employs over 25,000 people in four major plants making everything from three-door Corsa subcompacts to Zafira vans. In the UK there are two factories producing automobiles under the Vauxhall badge. Opel has other facilities in Belgium, Poland and Spain.


GM's board was expected to pick a buyer for Opel at a meeting on Friday, but the U.S. carmaker's directors declined to endorse a sale to either party, prompting unions to threaten spectacular measures to force a decision.

German newspaper Die Welt on Tuesday cited German government sources as saying GM still wants to clarify with Magna some remaining issues related to Opel's intellectual property, its patents and licenses.

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 source said.

By not selling Opel/Vauxhall, GM has essentially two options -- providing 3 billion euros ($4.3 billion) to continue operations (less than the 4.5 billion promised by the German government) or liquidation, said credit analysts at UniCredit.

Berlin and the German states which host Opel plants have made clear they want Magna to get Opel and are set to provide 4.5 billion euros 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.

Opel and its sister brand Vauxhall sold just over 560,000 cars in Europe in the first half of the year, giving it a market share of 7.6 percent, according to data compiled by the ACEA auto industry association.

(Additional reporting by Tom Kaeckenhoff and Angelika Gruber; Editing by David Holmes and Rupert Winchester)

($1=.6990 Euro)