"I regret that the board has not after all taken a decision," Karl-Theodor zu Guttenberg was quoted as saying by the online edition of the Hamburger Abendblatt newspaper on Saturday, Aug. 22.

The German government had "provided GM with all the necessary information," the minister added.

The 100-year-old company, once the world's largest automaker, is feeling the heat from the German government which wants it to sell Opel to Magna International, a Canadian auto parts manufacturer backed by state-owned Russian bank Sberbank.

But GM's newly-appointed board at a meeting on Friday in Detroit failed to support the Magna sale, backed by its executives, because of a rival bid from Belgian investor RHJ International.

"The GM board of directors met today to discuss options for Opel," GM spokeswoman Karin Kirchner said in a statement late on Friday. "No decision was taken."

An anonymous source familiar with the situation told the Wall Street Journal that board chair Edward Whitacre had argued that the offer from RHJ should be taken more seriously.

According to the source, GM's board opted to ask the German government for more information on state financing for a deal with RHJ.

GM itself emerged from bankruptcy in July after wiping out $47 billion (33 billion euros) in debt in a restructuring that left it majority-owned by the US government.

Setback for German government's plans

The news is a setback to the German government and Opel's 25,000 German employees, who were expecting Opel's life-saving sale to Magna to be confirmed at the GM board meeting. Economics Minister Karl-Theodor zu Guttenberg was quoted on Thursday as expecting "a clear signal" on the future of Opel to emerge at Friday's conference.

Magna's bid for Opel is backed by the German government, which has offered a financial incentive of $6.4 billion. But Germany set out tough financial requirements for GM, asking for help with dealing with Opel's possible deficit of $1.7 billion.

Chancellor Angela Merkel told the Frankfurter Allgemeine Zeitung newspaper on Thursday that Magna's experience in the auto industry and its "better concept" for Opel made it a superior buyer than RHJ. Facing elections next month, Merkel is convinced a deal with Magna would be the best option to save jobs.

Complicated deal

But it is precisely Magna's expertise that considerably complicates the deal for GM. Should GM approve a sale to Magna, keeping only a minority stake of 35 percent, it would lose most of its influence on Opel's production and distribution in Europe.

On top of this, Magna's bid also includes a 27.5-percent stake for the Russian state bank Sberbank, with Russian carmaker GAZ as an industrial partner holding the option to buy Sberbank's stake. GM's board fears that a deal with Magna would therefore create a serious competitor not only in the European automobile market, but the growing Russian market. A deal with Magna would also rule out the option of Opel's eventual re-absorption into GM.

The offer of financial investor RHJ is much friendlier. According to reports, RHJ would allow GM to keep control of the technological side of Opel, and to retain the possibility of re-acquiring its European subsidiary in a more secure future financial climate.

"If you want to know why the board is agonizing over this decision, take a look at the competing spheres of interest," summed up one commentator in news magazine Der Spiegel, "Either GM surrenders its access to Opel, or it loses the money from the German government. The question: which is costlier?"

European branches watch Opel saga with bated breath

The sale of Opel is being keenly watched, as billions of euros in government aid are riding on the outcome, as are the jobs of thousands of Opel workers in Europe.

Apart from its 25,000 German employees in four major plants, making everything from three-door Corsa subcompacts to Zafira vans, there are two key Opel factories that produce cars under the Vauxhall badge in the UK.

Opel has other facilities in Belgium, Poland and Spain.

No date has been set for another GM board meeting or a deadline for a decision. The alternative to a sale of Opel would be insolvency, analysts have said.

bk/Reuters/AFP

Editor: Toma Tasovac