US carmaker General Motors Corp, which will likely be in bankruptcy by the end of this month, has pleaded for help from the German government to support its ailing European operations, but German Economics Minister Karl-Theodor zu Guttenberg said Berlin intends to fence off GM assets in the country and place them in a trust if the company fails. Chief Executive Fritz Henderson said GM was prodding the government to provide more funds as it considers offloading German subsidiary Opel and other European operations as part of a massive restructuring effort.

“We have a need for funding actually in our European business that’s important and urgent,” Henderson said. He said GM is prepared to take a minority stake in its major European subsidiaries, including Britain’s Vauxhall. Italy’s Fiat Spa, which already plans to take over Chrysler, and Canadian-Austrian firm Magna are involved in the takeover talks. Others on GM’s chopping block include Sweden’s Saab and US brands Hummer, Saturn and Pontiac. Bankruptcy is still the most likely outcome for the largest US carmaker as the company races to settle outstanding debt with its creditors and prove it can run a viable operation.

GM will settle on a list of dealerships to be closed as part of that effort, Henderson said. President Barack Obama has given GM a June 1 deadline to restructure or file for insolvency. “It’s more probable that we would need to resort to a bankruptcy process but there’s still an opportunity and still a chance for it to be done outside of a court process,” Henderson said German officials said creating a legal trust would allow more time for negotiations with potential bidders for GM Europe, which makes Opel and Vauxhall cars. Fiat of Italy and Canadabased Magna have both shown interest in a buyout if the terms are right. Berlin has ruled out nationalising Opel.

Zu Guttenberg said a trust would only take effect if there was a sustainable proposal on the table from at least one potential investor. Zu Guttenberg gave a deadline of May 20 for a proposal to be filed. GM is expected to file for insolvency at the start of next month. Trusts are legal constructs that can own property for the benefit of somebody else, and are usually run by boards of trustees. Transferring the German assets to a trust would mean they could not be seized by creditors. Germany has used similar trusts in the past to bring industrial assets under government control without actually making them government property.

Opel dealers in Europe are offering to help the ailing German carmaker by investing 500 million Euro in return for a 10 to 15 percent stake, the dealer group said last week in Vienna. Meanwhile, there was opposition from the administration in the United States against Germany’s plan to put Opel under temporary trusteeship of the state until an investor is found, according to media reports. All 25 national members of the Euroda association - except for Finland - had approved the dealers’ offer at a meeting in Austria’s capital, the group’s Chairman Jaap Timmer told reporters.

“In return, we demand a fair equity share in the new company, representation in the supervisory board, and obviously, a fair financial return on our investment,” said Timmer, whose association also represents Vauxhall dealers. The plan is to pay 150 Euro for each sold car into an emergency fund over the coming three years to contribute to Opel’s rescue, as 35,000 retail jobs are at risk in Germany alone. Timmer said it would hurt retailers to pay into the fund, especially those in Central and Eastern Europe, “but it would be far worse if we had no manufacturer at all.”

Euroda is now set to start talks with the players who would have to support the offer, including the government in Germany and other countries where Opel cars are made, as well as potential investors such as Fiat or Magna. Timmer said that he had received positive signals from Opel, which is a subsidiary of close-to-bankrupt US automaker GM, and that the German government was informed.

For their part, the dealers would seek at least 10 percent to be able to wield some influence on Opel’s board, but could not afford more than 20 percent, Euroda Vice Chairman Albert Still said, stressing that the rate was preliminary: “We don’t know the final price for a new Opel-Vauxhall firm.” Euroda’s leaders did not express any preference for either Fiat or Magna and its group of Russian investors, but said that Magna had indicated more interest so far.