The wait is over
September 10, 2009
After months of uncertainty and intense negotiations, General Motors says it has decided to sell its European unit Opel and sister company Vauxhall to Canadian auto-parts maker Magna.
During a press conference in Berlin on Thursday, Fred Irwin, chair of the German-led Opel Trust said, "We're confident that with today's decision we've laid the foundation for a successful future of the Opel and Vauxhall brands."
US carmaker General Motors said it would keep 35 percent of the shares in its European Opel/Vauxhall operations and sell 55 percent to the Magna consortium, which includes Russian state-owned bank Sberbank and Russian carmaker Gaz. Opel employees will hold a stake in the remaining 10 percent.
Now that Magna's bid has been approved, there are still many more negotiations to be carried out. GM expects a detailed agreement to be signed within a few weeks, and the deal to close within the next few months.
Political boost for Merkel
Analysts say GM's decision gives Angela Merkel a political boost ahead of German parliamentary elections on Sept. 27. The German government had backed Magna's bid for a majority stake in Opel, and had promised 4.5 billion euros ($6.5 billion) in state-backed guarantees to aid Magna's restructuring of GM's European unit.
Merkel welcomed the sale, saying it represented "a new beginning for Opel," but added that "Opel faces a difficult path."
When asked by reporters what strings were attached to the deal, Merkel responded: "I think these conditions are manageable and negotiable. I believe that the overall financial conditions that we made, for instance, will also be accepted by General Motors."
Merkel said that Germany would begin talks with its European partners that host Opel plants, including Poland, Spain Belgium, and Britain. She promised fair negotiations on how to share the load.
Germany is home to 25,000 Opel workers, about half of GM's total European workforce which includes about 5,000 others at British sister brand Vauxhall.
Magna had previously said it would cut 10,000 jobs in Europe.
vj/nk/dpa/AFP/AP
Editor. Nancy Isenson