GM's Opel move raises anger, new uncertainty

Font Size

Print

Feedback

Email

Discuss

Related Articles

Washington Post to shut New York, Los Angeles, Chi...India, US to enhance eco relationsPoor connectivity hampers SAARC trade

Berlin: General Motors Co's decision to scrap the sale of European subsidiary Opel raised new uncertainty Wednesday over the unit's future, astonishing politicians in Germany and Russia, and prompting workers to plan walkouts in protest.

The GM board's unexpected decision to call off the sale to auto parts maker Magna International Inc. and Russian lender Sberbank was a startling end to months of haggling in which Chancellor Angela Merkel and other German leaders had strongly backed the deal.

Now German workers worry GM will make even more cuts to return Opel to profit than Magna would have. Still, the decision won a cautious welcome from union officials in Britain and Poland, where workers had feared possible cutbacks in a Magna takeover.

John Smith, GM's chief negotiator for the sale of Opel, said in a conference call Wednesday that GM's plan was similar but not identical to that presented by Magna and Sberbank, which had called for the elimination of 10,500 European jobs or about 20 percent of the work force. Smith did not elaborate on possible job losses.

"We feel that ... once people have a chance to look at it closely, if they liked the Magna plan, they will also like" GM's plan, he said. "We're going to let the plan speak for itself."

"We'll very soon present to the European governments" the plan, Smith said. He added that GM hopes "to arrive by the first quarter at a restructuring plan with the governments and the unions."

GM's decision handed Merkel's new center-right coalition government an unwelcome test just a week after taking office. German officials swiftly demanded a restructuring plan from Detroit and vowed to recover by November 30 a euro1.5 billion ($2.2 billion) bridge loan granted to keep Opel afloat as a buyer was sought.

"We will get the taxpayers' money back," new Economy Minister Rainer Bruederle told reporters. "Dealing with employees in this way eight weeks before Christmas is in no way acceptable," he added.

GM's Smith said the US automaker would repay the loan "if we're requested to do so" by Germany.

"We've already begun to repay some of the bridge loan," Smith told reporters on the conference call. "All that is outstanding is roughly euro900 million."

Merkel, who was flying home from a speech to the U.S. Congress when GM announced its decision, made no public comment Wednesday, but officials made clear their annoyance.