General Motors has pulled out of a deal to sell a majority stake in Vauxhall/Opel. The GM board cited "an improving business environment for GM over the past few months" as the reasons for the u-turn.
US sales of General Motors vehicles rose in September for the first time in almost two years, the company recently announced.
Steve Cropley blog: GM keeping Vauxhall is great news
A brief history of MagnaA brief history of GM
The German government had offered GM a £4bn loan on the back of the sale, in which 55 per cent of Opel would have been sold to an alliance of Canadian parts manufacturer Magna and Russian Skerbank, and there are already calls for GM to return to Germany more than £1bn of 'bridge' financing.
The company is now looking for alternative loans from other European governments. There are currently Vauxhall/Opel plants in Germany, Spain, Poland, Belgium and the UK.
The previously agreed takeover by Canadian company Magna had threatened to axe around 10,500 Opel jobs in Europe, 600 of which were due to be lost among the 5,000 British workers in Vauxhall.
GM also said that it aims ‘re-structure’ GME at a cost of £2.7bn and negotiate with the unions on a ‘plan for meaningful contributions to Opel’s restructuring’ – a signal that job losses and even a factory closure are still on the agenda.
“GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration,” said Fritz Henderson, president and CEO.
“We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers and dealers, which is reflected in the decision reached today.”
“This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”
“While strained, the business environment in Europe has improved.” Henderson said. “At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.”
GM’s move was made possible by an EU Commission ruling on 16 October which said there were "significant indications” that the German government had broken EU state aid rules during negotiations to sell off Vauxhall/Opel.
The Commission accused Germany of suggesting that state aid for Opel would only be forthcoming if Magna was the winning bidder.
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Re: GM cancels Opel sale
Can some one help me, if GM had to sell off GM Europe and SAAB to get US government dollers when it went bankrupt, why did it not have to sell GM DAT (DEAWOO) or Holden in Australia. Also why did it not have to sell its other joint ventures in China and also in South America.
It has pondred my mind for the last 6 months and i have read nothing that would explain this, so if any one has any idea please let me know . Thanks Daddy3
Re: GM cancels Opel sale
GM has an engineering centre in UK to give work to?
Mandleson tends to do nothing and hopes for the best, which has sadly been the downfall of our industries over many decades at the hands of many governments. The Germans know what they are doing. They will be fine (predictably).
Re: GM cancels Opel sale
I did stick to the facts, and I hate no one. The problem here is that the only nation upset by GM retaining its company is Germany. The UK, Spain and Belgium are very pleased with the outcome. If Germany does not want to work with GM, maybe it should move to countries that will appreciate the opportunity to work with GM.