GM Decides to Keep Opel After all

November 3, 2009

(ChattahBox) — General Motors Co. said Tuesday it will keep its European Opel unit and restructure it instead of selling a 55 percent stake to Canadian auto parts maker Magna International, undoing months of negotiations.  General Motors board was expected to agree to sell Opel to Magna International, but an improving business environment for GM over the past few months, plus political issues posed complications for the deal. Magna has said it would cut about 10,500 jobs in Europe, including 4,500 in Germany. That prospect did not sit well with German unions and politicians because Magna would be receiving about $6.7 billion in government aid. According to the Wall Street Journal, GM’s board decided to review the sale one final time after the European Union opened the door by expressing fresh concerns in light of indications that Germany may support an alternative restructuring plan for Opel other than the Magna sale. In keeping Opel, GM would retain a critical asset because of is its small car expertise.


Comments

One Response to “GM Decides to Keep Opel After all”

  1. akorozco on November 6th, 2009 11:26 am

    The Germans are livid, the Russians are livid, the Opel workers are walking out… GM seems to be the only one who’s happy with this deal.

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