ONCE-invincible industrial giant General Motors is moving inexorably towards assuming a new sobriquet – Government Motors – as it enters the most critical few days in its 101-year history.

Government ownership will be the effect of the administration of President Barack Obama taking a 72,5% stake in the former bastion of capitalism in a deal to save the company from the biggest single crash in US industrial history.

But the ramifications will reach more widely than “back home” in the US – they will reverberate from Germany to Kempston Road in Port Elizabeth and from Luton in England to Melbourne in Australia.

Despite the crisis in the US, General Motors in South Africa has reiterated that its future is safe as it is a “self- sustaining operation ... (we are) responsible for our own future”.

That is not the case in Europe, where in a setback to saving Opel in Germany, one of two remaining bidders for the operations, Italy‘s Fiat group, said it would skip crucial talks over the weekend as frustration was said to be rising at rival bidder Magna.

That came as Germany and the US were preparing for perhaps their last chance to shield Opel from the looming GM bankruptcy after the collapse of a first round of talks. The US government balked at Germany‘s plan to place Opel assets in a trust while a deal with a suitor was finalised.

This infuriated Berlin, which refused to release ß1,5-billion (R16,8-billion) in bridge financing for Opel.

Fiat chief executive Sergio Marchionne said early yesterday that his company had not been granted full access to Opel‘s financial records and was not in a position to frame a proper merger proposal.

“The last round of requests which would require Fiat, among other things, to fund Opel on an emergency basis while the German government determines the exact timing and conditions of the interim financing, would expose Fiat to unnecessary and unwarranted risks.”

He added that the company remained “committed to finding ways to bridge the expectations of both General Motors and the German government”.

Separately, a source close to the negotiations said Magna and GM had come close to a basic agreement in talks that dragged on into the early hours of yesterday, but that the Canadian car parts group was growing increasingly frustrated with new GM demands. “The hopes of getting an agreement are vanishing by the minute,” the source said.

The setback means the likelihood of an insolvency for Opel has risen.

Germany wants Opel‘s assets in the trust to shield them from GM creditors once the parent files for Chapter 11 bankruptcy in the US, but first it must win US approval and be sure a deal with a bidder is possible.

Meanwhile, small bondholders in GM in the US have until 5pm today to accept the deal or face having their investments all but wiped out during a contentious bankruptcy process.

In a last-minute deal this week, major bondholders who own about 20% of GM‘s $27,2-billion (R217,6-billion) unsecured debt agreed to accept a 10% stake in the restructured company and undetakings to buy a further 15% in return for forgiving its debt.

A filing could come this weekend.

During the bankruptcy process, GM‘s assets would be sold to a new company funded by the US government, which would resume GM‘s business.

The government has provided $19,4-billion (R155,2- billion) in financing to GM to keep the company going.

The company revealed late on Thursday that the government had also agreed to provide more than $50-billion (R400-billion) in so-called debtor-in-possession financing to pay for the company‘s restructuring.

It could be as long as 18 months before GM became a publicly traded company once more.

The pressure on the motor industry was illustrated this week when Visteon, America‘s second-biggest parts maker and a former unit of Ford, and Metaldyne Corp, a unit of Asahi Tec, of Japan, went bust.