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GM cancels sale of its European unit Opel

Text by News Wires

Latest update : 2009-11-03

Struggling US carmaker General Motors announced on Tuesday that it has decided to keep its European division Opel, making a U-turn on plans to sell it to Canadian firm Magna after months of talks.

AFP - General Motors said Tuesday its board decided to keep Opel, scrapping an on-again, off-again plan to sell its big European division.
GM said in a statement the board made the decision because of "an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM's global strategy."
It said the GM board "has decided to retain Opel and will initiate a restructuring of its European operations in earnest."
"GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration," said Fritz Henderson, president and chief executive.
"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."
GM had announced plans to sell a 55 percent stake in German-based Opel to Canadian firm Magna and its Russian partner Sberbank.
Although GM had agreed to the sale, the European Commission, the executive arm of the European Union, was concerned that 4.5 billion euros (6.6 billion dollars) in promised German aid was only available to Magna.
The saga has dragged on since February, with the fate of at least 10,500 of GM Europe's workforce of around 50,000 hanging in the balance.

Date created : 2009-11-04