The GM board’s unexpected decision to call off the sale to auto parts maker Magna International Inc. and Russian lender Sberbank was a startling end to months of haggling in which Chancellor Angela Merkel and other German leaders had strongly backed the deal.
Now German workers worry GM will make even more cuts to return Opel to profit than Magna would have. Still, the decision won a cautious welcome from union officials in Britain and Poland, where workers had feared possible cutbacks in a Magna takeover.
John Smith, GM’s chief negotiator for the sale of Opel, said in a conference call Wednesday that GM’s plan was similar but not identical to that presented by Magna and Sberbank, which had called for the elimination of 10,500 European jobs or about 20 percent of the work force. Smith did not elaborate on possible job losses.
GM’s decision handed Merkel’s new center-right coalition government an unwelcome test just a week after taking office. German officials swiftly demanded a restructuring plan from Detroit and vowed to recover by Nov. 30 a 1.5 billion euros ($2.2 billion) bridge loan granted to keep Opel afloat as a buyer was sought. “We will get the taxpayers’ money back,” new Economy Minister Rainer Bruederle told reporters. GM’s Smith said the US automaker would repay the loan “if we’re requested to do so” by Germany.
Russia, which had backed the Magna-Sberbank plan, also was caught by surprise.
Russian Prime Minister Vladimir Putin said on Thursday that General Motors’ U-turn over the sale of Opel showed the generally “scornful” approach of US companies when dealing with their European partners. “The last-minute refusal to complete the Opel deal is not harmful to our interests, but it shows that our American partners have a very original culture when dealing with counterparties,” Putin said told a cabinet meeting. “We will have to take into account this style of dealing with partners in the future, though this scornful approach toward partners mainly affects the Europeans, not us.”
