Job worries

The breakthrough was seen as a coup for Germany, where the government under Chancellor Angela Merkel had pressed hard for General Motors (GM) to choose Austrian-Canadian parts manufacturer Magna and Sberbank of Russia, offering 4.5 billion euros in German taxpayers' money. Around half of Opel's 50,000 strong work force is based in Germany, and Opel's new owners have pledged to keep open its four main plants in the country.

But with Magna expected to cut 10,000 jobs, elsewhere in Europe there were worries about where the axe would fall. Opel has about 7,000 employees in Spain, 4,700 employees at Vauxhall in Britain, 5,500 employees in Belgium, 1,800 in Italy, 1,600 in Austria and 1,500 in France, according to GM Europe's website.

Deal removes "uncertainty"

The deal finally removes some of the uncertainty that has plagued Opel workers across Europe, Tony Murphy, company policy director at the European Metal Workers' Association, told Deutsche Welle. GM's announcement on Thursday "has given workers hope for a future," he added. "But Magna has only pledged to keep all plants open in Germany. We have always pushed for a buyer that safeguards jobs across Europe."

Magna has not explicitly ruled out closing down facilities in other parts of Europe. And the company's announcements of planned job cuts at specific locations are already seen by some as a first sign of worse things to come. In Britain Opel operates two plants under the brand name Vauxhall. The 2,200 workers at the Ellesmere Port facility near Liverpool have mixed feelings about Magna now being in the driver's seat.

Magna to cut British jobs

"We are glad that there is a new owner and we did not run into bankruptcy," said John Fetherston, an Ellesmere Port organizer for Britain's largest trade union, Unite. "But Magna plans to cut 830 jobs and possibly close our pension scheme," he added.

Other options would not have necessarily been better. The fact that other bidders, like Brussels-based investment firm RHJ, had not mentioned similar plans for British plants does not mean they did not have any such plans, he admits. "But when we looked at GM's own original plan – that was a total disaster [for Opel jobs] across Europe."

Even as Britain's business secretary Peter Mandelson is surely aware of British workers' concerns over Magna, he appears somewhat more upbeat about the future for Vauxhall's workforce. He was "satisfied" about the new owners' "commitment to Vauxhall's plants," he said on Thursday.

European locations at risk

Things are arguably worse elsewhere in Europe, where the survival of individual plants is at risk. GM vice-president John Smith said in Berlin on Thursday that Opel's new owners were "contemplating" winding down a plant in Antwerp, Belgium, and shifting some production from Spain to Germany.

Unions in Belgium expressed hope that a decision to close Antwerp had not yet been taken, and the head of the Flemish government called on the European Commission to probe conditions attached to Germany's state aid.

GM deal part of German electioneering?

The political circumstances facilitating yesterday's decision have now become a new focus of attention. German opposition parties have blasted what they see as blatant electioneering on the part of the governing coalition of Conservatives and Social Democrats.

It's a view that resonates with those across Europe at the receiving end of the Magna deal. "Reading between the lines, it is clear that there was going to be a push for a quick decision before the election," said the metalworkers' Tony Murphy.

John Fetherston from Unite takes a similar view: "The question is, would the [German government] also have done it five months into a new term?"

"The German government is rightly supporting German jobs and the deal was ably aided by the German government," he says, adding that British politics and particularly Business Secretary Mandelson will certainly also fight for British workers' interests, even though "we have nothing tangible yet."

"Key issues" remain

Despite German politicians hailing GM's decision for Magna as a landmark, the deal presently offers little that is tangible to anyone. Two weeks before Germany's general election it is as yet little more than a declaration of intent. No final contracts have been negotiated or signed, the German government is keeping under wraps the details of its negotiations with GM and there are more than just details that remain to be worked out.

GM has pointed out that "several key issues" still need to be dealt with. This is a major reason why Europe's car workers are still hesitant.

"We are waiting for the small print of the final agreement," said Tony Murphy.

For the new German government it could yet turn out to be a major headache.

Author: Ranty Islam
Editor: Nancy Isenson