04.11.2009
GM have scrapped its plans to sell Vauxhall and Opel to Magna, surprising many industry analysts and angering the German government. GM cites “improving economic conditions” as its reason. It is also understood that the American car company had become anxious that the planned sale of Vauxhall and Opel could see the two car manufacturers competing against its former parent in high-growth markets such as Russia.
The decision comes as a relief to the British government and to workers at Ellesmere Port in Cheshire, where the Astra is manufactured. Business Secretary Lord Mandelson is understood to be prepared to offer loan guarantees of up to £400m in order to secure British jobs, meanwhile Germany’s Economic Minister, Rainer Bruederle, branded the decision as “totally unacceptable”. The German government had already provided a €1.5 billion bridging loan to GM and saw the sale to Magna and Sberbank, its Russian partner, as the best way to preserve German jobs.
Negotiations by Germany’s Chancellor Angela Merkel, caused controversy after her offer of €4.5 billion (£4.02 billion) in financial aid in return for the Magna deal and Lord Mandelson had complained to the European Commission warning it not to accept anything that looked like a “political fix or any linkage between aid and retention of jobs in any specific plant or country.”
Siegfried Wolf, Magna’s joint chief executive, said last night, “We understand that the board concluded that it was in GM’s best interests to retain Opel.” He added that “Magna will continue to support Opel and GM in the challenges ahead.”
Take a look at the video above for some further insight on this story.
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5 Comments
Mike GT
November 4, 2009Changing its mind is GM’s prerogative.
admin
November 4, 2009GM have agreed to pay back the €1.5 billion bridging loan to the German government, but then the British government might possibly compensate them with a €600k loan, so this is probably still a prudent decision for the GM execs to have made.
Mike GT
November 4, 2009Changing its mind is GM’s prerogative.
admin
November 4, 2009GM have agreed to pay back the €1.5 billion bridging loan to the German government, but then the British government might possibly compensate them with a €600k loan, so this is probably still a prudent decision for the GM execs to have made.
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