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

The last-ditch offer would have the federal government and German states with Opel plants split the initial aid bill without waiting for other European countries that host Opel facilities to chip in, Deputy Economy Minister Jochen Homann told the Frankfurter Allgemeine Zeitung newspaper.

We have offered General Motors to provide the entire sum, he was quoted as saying, adding other countries such as Britain, Spain, Poland and Belgium could contribute aid later once it was clear how many of Opel's 50,000 staff in Europe would stay on.

The offer comes ahead of a General Motors board of directors meeting on Friday that sources close to the deal said would address the sale of its European business Opel. Both Magna and Belgian financial group RHJ are in the hunt.

We are on the home stretch, one of the sources said on Wednesday, adding 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 state aid in May to avoid being swept into GM's brief bankruptcy -- have to 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.

Belgium-based financial investor 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.

We've been told the RHJ bid would involve (annual production capacity) volumes of 200,000 (and) no job losses -- we've seen documentation to that effect -- but there would still be a million and one questions to ask, as both RHJ and Magna would want to cut costs, he said.

Vauxhall employs around 4,700 staff in Britain and has plants in Ellesmere Port and Luton. The Luton site is 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.

German unionist Armin Schild, who sits on Opel's supervisory board, appealed to labor to take a broad view of the deal.

It can't work for everyone to take a provincial view and promote the concept that makes him the winner, he said, warning against letting the labor force be split with cheap tricks.

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.

The first priority is for Opel to survive -- if there is no Opel, there is no Opel Antwerp either. If the Spanish still think the sun is turning around Spain and vice versa, they're wrong. But they have the right to their opinions, they're just narrow-sighted, he said.

($1=.7091 Euro)

(Additional reporting by Patricia Uhlig in Frankfurt, Robert Hetz in Madrid, Anne Jolis in Brussels, John Bowker in London and Rene Wagner in Berlin; Editing by Mariam Karouny and Simon Jessop)