GM board to reconsider Opel next month

'NEVER SAY NEVER'

GM Chief Executive Fritz Henderson had expressed confidence on Wednesday that an Opel sale would move ahead and said the "mainstream plan" remained closing the deal with Magna.

Because of the advanced stage of negotiations and the pressure on Opel's cash position, GM's board is most likely to proceed with a sale to Canadian auto parts supplier Magna and its Russian partner Sberbank , a person with direct knowledge the GM negotiations said on Friday.

But the board could also re-examine the possibility of keeping Opel now that German officials have been forced to provide explicit assurances that their financial support for Opel was not limited to Magna, according to the source, who asked not to be named because the talks remain private.

"I would never say never," the person said about the possibility that the GM board could opt out of the Magna deal.

GM's Smith said the company would work to resolve remaining open issues, including labour cost reductions in coming days.

Under the Magna deal, Opel's workers would receive a 10 percent stake in the new company in return for labour cost concessions, while GM would a 35 percent stake.

Opel's buyers originally intended to cut around 10,500 jobs in Europe, including around 4,000 in Germany, but talks with labour leaders have been whittling down the number of cuts.

Workers in Spain are due to vote on a preliminary deal that would keep a plant there open at the cost of 900 jobs.

UK-based union Unite has already reached an agreement with Magna that would preserve two Vauxhall production plants and rescue 600 of the jobs that were slated to go. Vauxhall employs around 5,500 people.