Leadership

German outrage at GM’s decision to cancel Opel sale

04.11.2009
The decision by US car maker General Motors (GM) to cancel its plans to sell a majority stake in its Opel division to a consortium of investors led by Canadian automotive company Magna International has sparked outrage in Germany.

GM’s decision, which was apparently taken following a six-hour meeting of the GM board last night, thwarts months of negotiations which also involved the German State and represents quite a setback to recently re-elected Chancellor Angela Merkel (pictured).

Magna had agreed to invest €500m in return for a majority stake in Opel, while the German Government was due to plough €4.5bn in loans into the car maker under the deal.

The German Government has now demanded that GM pay back a €1.5bn bridging loan it gave to the US car maker, while German unions said Opel workers would commence walk-outs from tomorrow in response to GM’s decision.

Germany’s Economy Minister Rainer Bruederle described GM’s decision to cancel the Opel deal as “totally unacceptable”, and he vowed to get taxpayers’ money back from the US corporation.

However, opinion on the deal’s collapse was much mellower in the UK and positively effusive from Unite trade union leader Tony Woodley, who described the move as a “fantastic decision”.

Fears had been growing in the UK that with Magna taking over Opel, with backing from the Germany Government, German jobs might have been preserved at the expense of British ones.

Opel operates as Vauxhall in the UK. It has two plants there and employs some 5,000 people.

The UK’s Business Secretary Lord Mandelson said in a statement issued today that he was “keen for very early discussions with GM over their plans for the business and how they will affect British plants and workers”.

“I have always said that if the right long-term sustainable solution is identified, then the Government would be willing to support this,” he added.