German Fury Over GM Opel U-turn
05/11/2009
General Motors' (GM) decision to hang on to its European car unit Opel, including Vauxhall, was welcomed in the UK but met with anger in Germany.
Unite union chief Tony Woodley, a former Vauxhall worker, hailed the news as a "fantastic decision".
But unions in Germany said workers would begin walk-outs from Thursday in protest at GM's decision.
The German government, which had backed the sale of Opel, demanded GM repayment of a 1.5bn euro ($2.2bn; £1.3bn) loan.
German leaders and labour unions had favoured a sale, to Canadian car parts maker Magna, as the best way to save German jobs as it included a guarantee that no German factory would be closed.
The German government had provided the 1.5bn-euro bridging loan to Opel to keep it afloat during the long, drawn out negotiations over the past few months to find a buyer.
GM first said in March that it wanted to offload Opel, which includes Vauxhall, when the US firm entered a period of bankruptcy protection that eventually saw it emerge with the US government as its biggest shareholder.
After months of negotiations, GM finally agreed to sell the brands to Magna in September, with the German government pledging Magna 3bn euros in loan guarantees on top of the existing bridging loan.
German strike action
Industrial union IG Metall said workers at Opel's four German plants would halt work - so-called "warning strikes" - on Thursday. Other plants in Europe would follow on Friday, it said.
Opel employs a total of 54,000 workers across Europe, with 25,000 based in Germany.
In the UK, its Vauxhall brand employs 5,500 people across two plants in Luton and Ellesmere Port.
The decision to sell Opel to Magna had been controversial because of the German government's offer of the 4.5bn euros in loans.
The European Commission warned last month that Berlin's offer of this aid may breach European competition rules, although the German government immediately denied any wrongdoing.
But on Tuesday the US giant said it had now decided not to sell the business because of "an improving business environment for GM over the past few months", and would now be seeking aid for Opel from all the European states where it has operations, including Germany.
'We know them'
Mr Woodley commented that GM's news was an "incredible turnaround".
"The decision is in my view fantastic, and the right decision for General Motors themselves," he said.
"There's no logic in breaking up the company. I believe it is the right decision in spite of a good deal that we'd struck with Magna."
However, some workers arriving this morning at Ellesmere Port, where they make the Astra model, were less than enthusiastic about the latest twist in the saga over GM's European operations. One employee said, "Hopefully it's good news but there are no guarantees, whoever was going to own us, there's still going to be cutbacks."
Business Secretary Lord Mandelson said he was keen for "very early discussions" with GM over how their plans affect its British workers.
Unite, the main union at Vauxhall, last month reached a deal with Magna to limit job cuts at the two factories to just 600 people, and all through voluntary redundancy.
John Featherstone, Unite's convenor at Ellesmere Port, said he believed there would still be some restructuring in the UK, "but I am pleased we will be dealing with GM because we know them and we understand their culture - and they know us".