Giant US carmaker General Motors Co (GM) plans to sell off a majority stake in its European offshoot Opel to a consortium led by the Canadian-Austrian auto parts group Magna International, German Chancellor Angela Merkel said yesterday.
Merkel’s announcement at a press conference in Berlin came after the company held a two-day board meeting in Detroit and follows months of uncertainty surrounding the fate of Opel, which has about half of its 50,000 European work force in Germany.
The German government has backed the Magna-led bid for a majority stake in Opel and said it would provide 4.5 billion euros (US$6.5 billion) in state-backed guarantees to help Magna restructure the GM European subsidiary.
NEW OPEL
Welcoming the GM decision, Merkel said it represented “a new beginning for Opel,” but conceded that it would not be an easy way for Opel.
The Magna consortium includes the state-owned Russian Sberbank and Russian carmaker Gaz.
The GM board’s decision comes at a critical time for Merkel, who is facing an election on Sept. 27. Opel is currently being propped up by a 1.5 billion euro (US$2.2 billion) bridge loan from Berlin.
Negotiations over the Opel sale are expected to continue. Key details of the deal have not been unveiled, including possible job cuts at the company’s European plants, as well as the exact size of the shareholdings in what has been called the New Opel.
Throughout the already protracted negotiations, GM indicated that it wanted to retain at least a minority stake in Opel, which is based in the west German town of Russelsheim. It is also understood to have imposed conditions on the sale to Magna.
DECISION
After a two-day meeting in Detroit, the GM board dispatched company vice president John Smith to Berlin to tell both the Opel workers and the German government its decision.
GM’s European subsidiary includes Opel’s operations in Poland, Spain and Belgium as well as Britain’s Vauxhall brand.
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