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Business

GM to sell Opel to Magna

Text by NEWS WIRES

Latest update : 2009-09-10

After around a month of speculation, German Chancellor Angela Merkel announced on Thursday that US automaker General Motors will be selling its European branch Opel to Canadian auto parts maker Magna.

AFP - US automaker General Motors has called a press conference on Thursday in Berlin to unveil its plans for the German unit Opel, the head of Opel's works committee told German television.
  
The GM briefing would take place at 1230 GMT, Klaus Franz told the public station ZDF, following a GM board meeting on Tuesday and Wednesday in the United States.
  
GM negotiator John Smith was to inform the German government of the US group's decision before the news conference.
  
Berlin still officially supports a bid for Opel by the Canadian auto parts maker Magna, backed by the Russian bank Sberbank, but they have not been able to finalise a deal with GM, which appears to want to hold on to Opel now.
  
Germany has thrown a financial lifeline to the automaker, which employs 25,000 people in the country and as many more elsewhere in Europe, and fears the announcement of layoffs just ahead of September 27 general elections.
  
According to a plan drafted earlier this year by GM and unveiled on Thursday by the Frankfurter Allgemeine Zeitung newspaper, GM plans to close its Belgian factory in Antwerp and two German plants in eastern Eisenach western Bochum.
  
Franz also backed Magna's bid, saying: "If reason and industrial logic carry the day, then Magna should win."
  
A rally has been called in Eisenach in case that is not the case, he warned.

Date created : 2009-09-10

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