Governor Roland Koch of Hesse, where the troubled automaker Opel is headquartered has said that the government must do whatever it can to keep the GM's Opel unit out of bankruptcy. Koch's remarks come ahead of another meeting on the carmaker's future.
Koch said that it must be the policy of the government to do everything possible to avoid an insolvency.
Koch's comments come in response to economy minister Karl-Theodor zu Guttenberg's remarks that an orderly insolvency of the carmaker would probably be the best course of action to protect taxpayer's money.
A number of bids have been received for the carmaker including offers from Italian carmaker Fiat SpA, Canadian auto parts maker Magna International Inc together with Russia's Sberbank and New York-based firm Ripplewood Holdings LLC.
According to German officials it was up to GM to choose Opel's investor, the government wanted to decide this week on modalities to lend state support to the selected party.
Opel employees number 25,000 which works out to nearly half of GM's European work force.
Though the government of Chancellor Angela Merkel is scheduled to meet on Monday to consider the bids, according to media reports quoted Gutenberg of saying that there was no guarantee that any of the bids would be accepted.
Opel, based in Rüsselsheim, is part of a GM business unit that had notched up sales of 300,000 cars and light commercial vehicles in Germany last year.
But Opel has been struggling following the global auto industry crisis and GM troubles at home. GM is expected to file for bankruptcy protection by a 1 June deadline imposed by Washington. The US government has already pumped $19.4 billion in government aid into the stricken company.
GM has meanwhile said that it was interested in reataining a stake in Opel but would need billions of Euros in government aid for a successful restructuring of its European operations.
Guttenberg said on Saturday that Fiat had improved its bid after some German officials and labour leaders indicated a preference for Magna's offer. However, a Fiat spokesman declined comment on Guttenberg's claims.
The spokesman pointed to interviews that Fiat chief executive Sergio Marchionne gave to the German news media in which he addressed concerns of the effect of a Fiat takeover of Opel on the workforce. Workers at Opel fear 20,000 jobs could go if the Fiat bid went through.
Marchionne was quoted on Sunday by a section of media that ''fewer than 2,000 German jobs would be lost under Fiat control of Opel, from a total European work force pruning of 10,000. He added that he did not see the need to close any German plant.
An earlier planned shut down of an engine plant in Kaiserslautern that would result in loss of 3,500 had angered workers and government officials.