Infighting amongst the current ownership at Opel and Vauxhall may force the two automakers into bankruptcy if a compromise is not realized.

The sale of Opel will be talked about in depth at today's General Motors board meeting, according to Bloomberg.  Controversy has swirled around the proposed sale, with Opel's parent wanting to sell to Belgian investment group RHJ International, while governments in Germany support another option.

If a compromise is not reached between the two sides, Opel could be forced into insolvency.

In addition to the German government, four different states in that country have provided financial support to Opel since GM entered bankruptcy, with the promise of an additional €4.5 billion.  The various government bodies all back a bid from Magna International, as they believe Magna will work harder to keep jobs in place once Opel changes hands.  Currently, Opel employs 25,000 people across their German operations in Hesse, North Rhine-Westphalia, Rhineland-Palatinate, and Thuringia.  Labor unions also support the offering from the Canadian-based manufacturer.

On the other hand, General Motors supports RHJ, an investment group that owns large stakes in several auto parts suppliers, and high-profile companies like Columbia Music Entertainment.  John Smith, in charge of GM's Opel negotiations, wrote that the Magna offer "contained elements around intellectual property and our Russian operations that simply could not be implemented."  Continuing on GM's website, he said accepting RHJ's offer presents "a much simpler structure and would be easier to implement."

However, politicians in Germany believe this to be a ruse.  According to Automotive News, several believe that RHJ will use the government funds to cut many workers during a complicated restructuring period, before selling the company back to GM.  Hesse premier Roland Koch said, "... there would be no consensus for the financing of an RHJ takeover," according to one German magazine, and that the governments would cut Opel's credit line if RHJ is selected as the winner.

GM does not have the final say in Opel's selected suitor.  That decision rests on the shoulders of five men picked as board members of the Opel Trust, set up as the interim majority owner of Opel and Vauxhall during GM's bankruptcy.  Opel Trust owns 65% of the automakers, with GM keeping 35%.  Its board is made up of: Chairman Fred Irwin, of Citigroup in Germany and former head of the American Chamber of Commerce in Germany; Enrico Digirolamo, CFO for GM Europe; Dirk Pfeil, a German government representative and former number two in Hesse's regional government; Manfred Wennemer, picked by the German government for his history as a Continental AG executive, and a reputation for being both blunt and economical.  Also on the board is John Smith, mentioned above, from GM Europe.

A Bloomberg source told the news outlet that the Trust also prefers insolvency over a sale to Magna, but this must be taken with a grain of salt as the board is clearly split on Opel's future.  Pfeil and Wennemer are believed to support Germany's backing of Magna, while Digirolamo and Smith are undoubtedly in favor of GM.

That would leave Chairman Irwin as being responsible for casting the deciding vote.  Irwin will be tasked with weighing the value of his strong connections throughout the governments of Germany against the needs of General Motors.