The pursuit of German carmaker Opel has narrowed to a three-way race between Italy's Fiat , Canadian-Austrian car parts group Magna and investment firm RHJ International.

In North America, bankrupt U.S. automaker Chrysler won court approval for financing and other requests to help move it quickly through a sale to a group led by Fiat and also named a chairman for the merged company.

Meanwhile, GM Canada planned to tell dealerships on Wednesday which of the country's roughly 700 dealers likely will close under a plan to slash the network by about 42 percent.

The German government had set a Wednesday deadline for bids on the unit of struggling U.S. automaker General Motors Corp , which is hurtling toward a June 1 U.S. government deadline to complete restructuring talks with stakeholders.

Fiat submitted an offer for GM's Opel and British brand Vauxhall, while a financial source told Reuters that RHJ had put in a bid and that Magna also was expected to.

A spokesman for GM Europe confirmed the automaker had received three bids on the Opel unit. GM has said a bankruptcy filing is probable and industry analysts and experts believe it could come within weeks.

Both GM and Germany, where Opel has four plants that employ some 25,000 staff, are in a race against time to finalize a sale of the group based in Ruesselsheim, western Germany.

GM will decide which investor gets Opel, but the German government will also play a big role because it would likely provide billions of euros in financing to help any buyer.

How far Berlin should go to prop up Opel, which traces its roots back to the 19th century, has become a topic of fierce debate ahead of a federal election in September.

Fiat , the centerpiece of a plan that would place the strongest pieces of bankrupt U.S. automaker Chrysler in a company led by the Italian automaker, would like to add Opel and other GM Europe assets to the mix to create the world's second-largest auto group behind Japan's Toyota <7203.T>.

On Wednesday, Chrysler said Robert Kidder, a private-equity investor and former consultant who once worked for Ford Motor Co , would become chairman of Chrysler Group when it emerges from bankruptcy and merges with Fiat.

Magna has proposed opening production at under-used Opel plants to other automakers. People familiar with Magna's plans told Reuters they include a partnership with Russian automaker GAZ which would offer Opel a stronger foothold in Russia, seen as a key growth market once global economies recover.

The third bid comes from Belgium-based holding company RHJ International , which has had heavy investments in Japan and has focused on the auto parts sector.

TOP-LEVEL GERMAN MEETING

German Chancellor Angela Merkel met with top cabinet members to discuss Opel's future after Fiat CEO Sergio Marchionne met with government officials on his bid.

The government has said it will examine the bids quickly but completing a deal could take months and will require delicate talks between Germany, the United States, GM and the eventual buyer.

GM Europe head Carl-Peter Forster told a German auto magazine that the sale process could last until the fourth quarter of this year and that Opel's liquidity would last into the third quarter.

Opel unions are skeptical about the Fiat bid, fearing their overlapping product ranges could spell plant closures in Germany, Austria, Britain or Belgium.

Should GM be forced into bankruptcy, the German government is keen to shield Opel from creditors of its U.S. parent until a buyer is finalized. The government has a plan that would place Opel assets with a trustee and provide bridge financing.

Germany must also win U.S. approval for its trustee scheme and a government spokesman said that a delegation stood ready to travel to the United States to discuss Opel.

GM's broad restructuring includes eliminating brands Saab, Saturn, Hummer and Pontiac to streamline its operations.

A senior government official told Reuters Sweden was optimistic about Saab's future after recent meetings with potential buyers. Saab had said on Tuesday that it had selected three suitors for take-over talks.

($1=.7334 Euro)

(Reporting by Frankfurt, Berlin, Milan, Paris, London, Toronto, Detroit and New York bureaus; Editing by Jason Neely, Leslie Gevirtz)

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