With Hummer and SAAB out of the way, General Motors Co. is likely to finalise a deal to sell its European brand Opel to a group led by Magna International Inc., according to reports from Germany.
The deal which was already agreed to more than a month ago hit turbulence with labor union demands for a veto on factory closures. Workers in the UK and Spain are worried that the 4.5 billion euros ($7.3 billion) in aid committed by the German government to fix Opel will come with conditions to reward the carmaker’s German factories only.
The deal will see GM sell 55 per cent of Opel to Canadian supplier Magna and its Russian partner Sberbank, 10 percent will go to employees in return for 1.2 billion euros in concessions and the old General will still keep a 35 per cent holding.
The interest by Russian’s largest commercial bank (Sberbank) indicates a new direction for the company to push Opel aggressively into Russia. Magna and Sberbank will inject 500 million euros ($810 million) into Opel. The plan involves cutting Opel’s workforce by 10,500 (currently 50,000+) across Europe. Opel has half of its workers in Germany with Belgium, Britain and Spain also heavily involved.
The German plants will continue operating however there are no guarantees for Opel’s Antwerp plant in Belgium and British site of sister brand Vauxhall in Luton.
Vauxhall currently employs approximately 5,500 people in Britain, the majority of them working at the Luton plant.