General Motors (GM) said yesterday it wanted to cut around 10,000 jobs at its European division Opel a day after the US car maker stunned the auto sector by scrapping plans to sell the German-based unit.
GM wants to slash costs by 30 percent at Opel, which would mean the elimination of about 10,000 jobs from a workforce of 55,000, GM vice president John Smith told European journalists during a telephone news conference.
GM said on Tuesday it was abandoning a project to sell Opel to Canadian auto parts manufacturer Magna International and state-owned Russian bank Sberbank, saying it would implement its own restructuring at the unit.
The decision sparked outrage in Germany, where half of Opel’s workforce is employed and where the government had backed the Magna-Sberbank deal in hopes of preserving as many jobs as possible.
German Economy Minister Rainer Bruederle on Wednesday slammed GM’s turnaround as “totally unacceptable.”
SUBDUED
Reaction was more subdued in Spain, Belgium, Poland, Austria and Britain, where GM also has Opel operations.
Smith acknowledged that “the German government had a very strong appetite for the Magna proposal, so I can well imagine and well understand” the German reaction.
“I am hopeful they will find merit in our plan,” he said.
Smith contended that there had been very little difference between the offers put forward by Magna and a rival bidder, the Belgian investment firm RHJI, and what GM has in mind for Opel.
“There is very little daylight between what RHJI proposed, what Magna proposed and what GM will propose,” Smith said.
But he added: “We continue to believe that we can restructure Opel with less money than any other investor.”
German Chancellor Angela Merkel returned on Wednesday from a high-profile visit to Washington and headed into a Cabinet meeting to discuss the news as Bruederle demanded details of how GM would restructure Opel.
NO WHITE HOUSE HAND
Merkel’s spokesman Ulrich Wilhelm said the chancellor would be in contact with US President Barack Obama in the next few days.
But the White House insisted it had nothing to do with GM’s decision.
Britain called for talks with the US manufacturer.
“I have always said that if the right long-term sustainable solution is identified, then the government would be willing to support this,” British Business Minister Peter Mandelson said.
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