Germans Disappointed In GM

News that General Motors backed out of its deal with Magna International and Sberbank was greeted with bitter criticism in Germany.GM's sale of Opel/Vauxhall to the Canadian-Russian consortium had seemed to be a sure bet.In the end,the abandonment was a defeat for Chancellor Angela Merkel,who had pushed so hard for the protection of German workers.Magna had pledged to keep all four German Opel plants open,and GM had received a two billion dollar bridge loan from Germany.GM finally decided it had to maintain a presence in Europe-especially its access to the emerging Eastern Europe.One German worker observed that it was foreseeable that GM would keep Opel.He knew it.
Thousands of Opel workers staged protests at all of the Opel plants in Germany.They fear they will lose two of the four plants.The workers were carrying red and yellow union flags and beating drums.GM said they have nothing to fear.GM intends to adhere closely to the outlines of the Magna-Sberbank deal.Fritz Henderson,GM's CEO,is currently in Europe to mend fences.GM says it may use its liquidity to restructure Opel/Vauxhall.

The Magna-Opel Deal

Canadian auto parts manufacturer Magna is leading a consortium that will acquire GM's Opel and Vauxhall makes,which employ 25,000 workers in Germany and the U.K.The news was greeted with a mixed response.While German workers welcomed it,British workers questioned whether they would indeed be secure.A German election was just a few weeks away,and this was Chancellor Angela Merkel's project:she felt it would best protect German jobs.Magna was the bidder that agreed to do so.Fritz Henderson,GM CEO,had called the Chancellor's office to notify her of the GM board's decision to sell to the Magna group.
GM will keep 35% of Opel/Vauxhall;the employees will get 10%;and the Magna consortium will get 55%.GM expects the deal to close in November or December.Magna may cut as many as 10,500 jobs at Opel/Vauxhall-up to half of them in Germany.