It would be fair to say that Germany is not best pleased this morning over GM’s decision last night not to sell Opel to a Magna-led consortium and, instead, retain and restructure the European unit.
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The decision triggered anger and dismay in Germany, which had led the talks and was putting up much of the cash, according to Reuters.
Opel labour leader Klaus Franz rescinded the millions of euros in cost concessions workers agreed to on the expectation that Magna would buy Opel while German economy minister Rainer Bruederle called GM’s behaviour “totally unacceptable” and Christine Lieberknecht, premier of Thuringia state, which hosts an Opel plant, called the decision a “low blow”.
German officials who asked not to be named told the news agency the decision came as a total surprise to chancellor Angela Merkel and her advisers during a visit to Washington, where Merkel addressed a joint session of Congress.
One Opel worker showing up for an early morning Thursday shift at the plant in Bochum, a factory seen at particular risk as GM swings the cost-cut axe, was in a bleak mood.
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By GlobalData“I don’t know what is going to happen here in Bochum if Magna does not take it over,” the man, who did not give his name, told Reuters.
Senior German officials were quoted as saying the Opel issue did not come up when Merkel, who had lobbied hard for Magna and its Russian partner Sberbank to buy Opel as the best way to preserve German jobs, met US president Barack Obama on Tuesday.
Juergen Reinholz, economy minister of Thuringia, said GM had signalled it would pay back a EUR1.5bn German bridging loan for Opel by the end of November.
Opel put the best face on its parent’s change of heart.
“The decision of the [GM directors shows] Opel and Vauxhall play a crucial role in GM’s global network – a position that GM will not give up,” it said in a statement.
“We will actively support all parties to implement this board decision as quickly as possible in order to safeguard a successful future for Opel.”
A GM Europe spokeswoman told Reuters late on Tuesday that the company was counting on European loan guarantees to provide the bulk of the financing it needs to overhaul Opel.
Countries with Opel plants including Germany, Britain, Spain and Belgium were originally supposed to provide EUR4.5bn in state aid to rescue the loss-making automaker.
Labour leader Franz said workers would not go along with GM’s “blackmail” of European governments and staff.
The GM board decision to keep Opel came after European Union officials challenged the terms of the funding Germany had pledged to support the sale of Opel to Magna.
