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Fallout fears as car giant GM heads for bankr -

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PETER CAVE: If the US car giant General Motors files for bankruptcy it's likely to send shockwaves
around the world. GM's restructure plans have been rejected by investors and the company has few
options but to file for bankruptcy.

Germany and Great Britain are already looking for willing buyers to rescue their GM subsidiaries,
Opel and Vauxhall. Automotive experts in Australia say Holden has benefited from the Government's
green car initiative but if it's sold off that could have long-term effects on local car-part
suppliers.

Jennifer Macey reports.

JENNIFER MACEY: As the American car giant GM limps towards bankruptcy its European subsidiaries are
holding crisis talks to discuss making a break. The German Government has already met with three
potential bidders to buy Opel, which has been in the GM family for the past eight decades.

German Foreign Minister Frank-Walter Steinmeier says it's time to start concrete negotiations.

FRANK-WALTER STEINMEIER (translated): I hope we'll make a good step forward today. We have to do
it. The people want clarity about their future. I'm sure we will secure the governmental interim
financing.

Opel needs this breathing space. I say that with the view of the current discussion and upcoming
decisions in the US. In other words, if the General Motors goes into insolvency in the next days,
the light cannot go off at Opel. We have to create conditions for the independent future at Opel.

JENNIFER MACEY: The German Government has offered a 1.5-billion euro or $2.7-billion aid package
for Opel. Late on Wednesday night the Foreign Minister along with Chancellor Angela Merkel met with
Fiat, Magna and RHJ International to discuss takeover offers.

Fiat has already made a bid for Chrysler, rescuing that US auto company from bankruptcy. But it's
also keen to secure Opel.

Magna is also in the running, says the CEO Frank Stronach.

FRANK STRONACH (translated): We see a very big future in Opel. It was always a bit suppressed
perhaps because it was not free, but we see a great future. We want to take part and we want to
build Opel to be a world brand.

JENNIFER MACEY: British unions have criticised their Government for being slower off the mark to
rescue its GM subsidiary Vauxhall which employs five-and-a-half-thousand people.

The UK Business Secretary Peter Mandelson says he's also met with the three potential bidders. He
says the Government may consider giving the eventual buyer some financial support but he says some
job losses may be unavoidable.

PETER MANDELSON: It may be that the head count, the workforce of General Motors Europe as a whole
will be reduced, rather than particular plants being closed. But it's too early to judge what will
happen because we're not at the stage of considering specific or detailed proposals from any of the
bidders.

What I have been concerned to do is to secure their commitment to the future of Vauxhall production
in the United Kingdom and I have received that reassurance from all three bidders for GM in Europe.

JENNIFER MACEY: In Australia, GM Holden has said in the past that it remains confident about the
future. The company is adapting to changes in the market having just released a small car with
plans for a new small car to be built at the Adelaide plant from next year.

Industry analyst Evan Stents is a partner at HWL Ebsworth. He says the company will benefit from
the Government's $1.3-billion green car initiative for the industry.

EVAN STENTS: That's of significant importance to overseas car companies because when you're making
decisions about research and development in green cars, which they're all doing at the moment,
they're going to consider where to best spend those dollars.

And knowing that there's a significant pool of money in Australia available for that sort of
research and development is going to incentivise them considerably in keeping Australia as part of
their global operations, and that obviously is Holden.

JENNIFER MACEY: But even if the subsidiaries manage to weather a possible bankruptcy, car-part
manufacturers and car dealers won't emerge unscathed.

The Center for Automotive Research in the US has released a study that shows a drawn out disruptive
bankruptcies for both GM and Chrysler could result in 1.3-million job losses in the US alone for
both direct and indirect jobs.

Evan Stents says if GM goes bankrupt payments to creditors down the line will be frozen.

EVAN STENTS: That decision itself, freezing creditor payments, will, can potentially see the
closure of a lot of component suppliers who are dependent on that cash flow, or the payment of
debts owing to them. And that can occur significantly in the US. You'll see a lot of companies
close in the US, but also too overseas companies including Australian companies who supply to GM
directly into the US, and there's some companies that do that in Australia as well.

JENNIFER MACEY: The US Government has given GM until next Monday to secure a rescue deal or file
for bankruptcy.

PETER CAVE: Jennifer Macey with that report.