Unions, Germany, Russia fume over Opel

Workers leave the Opel plant after a shift change in Bochum, Germany. Ina Fassbender/Reuters

Germany's politicians fumed with anger and Opel workers cancelled cost concessions and readied walkouts after General Motors Co. cancelled the sale of its European subsidiary to parts maker Magna International and Russian bank Sberbank.

Klaus Franz, Adam Opel GmbH's top employee representative, called it a “black day" and said workers would start brief work stoppages Thursday.

GM's decision Tuesday to abandon the deal was a sharp blow to government and labour officials who supported it as the restructuring option that would save the most jobs in Germany.

The German government had put up a €1.5-billion bridge loan to keep Opel afloat as a buyer was sought, and promised €4.5-billion in further financing so Magna and Sberbank could take a 55 per cent stake.



The cancellation took the newly elected government by surprise, coming just after Chancellor Angela Merkel left the U.S. after a well-received speech to a joint session of Congress.

In Berlin, Economy Minister Rainer Bruederle vowed Wednesday to recover the €1.5-billion in bridge financing.

“We will get the taxpayers' money back," he told reporters, adding that GM's move was “totally unacceptable."

GM Europe spokeswoman Karin Kirchner said the company was prepared to repay the €1.5-billion. “If we're asked, GM will repay the bridge loan in question," she said.

GM's decision also caught the Russian government unawares. Dmitry Peskov, spokesman for Russian Prime Minister Vladimir Putin, called it “astonishing."

The mood was opposite in Britain, where GM Europe builds its Vauxhall brands. British workers had feared the strong German government support for Magna meant they – along with Opel workers in Spain and Belgium – would take the brunt of any restructuring.



Tony Woodley, a former Vauxhall worker and joint leader of the Unite union, called GM's move a “fantastic decision" for the 5,500 workers at the plants in Ellesmere Port and Luton.

“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," he said. “It is the best decision for Britain and our plants. I am absolutely delighted that General Motors have finally done the right thing for them and for us."

Opel was transferred to a trust to keep it out of GM's now-completed bankruptcy restructuring in the U.S. Initially, GM's board had favoured a rival bid by investment firm RHJ International, in part for fear that Magna and Sberbank could create competition for Chevrolet in Russia, a key market.

The offer from RHJ International required less government aid but appeared likely to involve more job cuts in Germany, something Merkel had been keen to avoid as it headed into elections in September.

Across Germany, where Opel employs some 25,000 people, the anger was palpable.

Juergen Ruettgers, the governor of North-Rhine Westphalia criticized GM's decision and vowed to fight for jobs at the Bochum factory, where Opel produces the Astra and Zafira models.

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