Opel's sale to Magna raises fear of layoffs
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General Motor's announcement that it is to sell Opel to Canadian auto parts maker Magna has raised fears of layoffs. Magna says it will have to cut one fifth of Opel's European workforce.
Uncertainty reigned in Germany after an agreement that ceded 55% of Opel to Canadian parts manufacturer Magna and Russian bank Sberbank.
After months of negotiations, Opel's troubled parent company General Motors finally agreed to part with its European brand, to buyers that had the approval of the German government.
"It's a positive step, but there is no need to get euphoric about it," German Finance Minister Karl-Theodor zu Guttenberg said on German television.
The agreement covers all GM's European operations except Swedish unit Saab, which is likely to be bought by a Swedish company with support from Chinese interests.
The breakthrough was seen as a coup for Germany, where the government under Chancellor Angela Merkel had pressed hard for GM to choose Magna and Sberbank, offering 4.5 billion euros in financial sweeteners.
Where will the job cuts be?
Half of Opel's 50,000 employees work in Germany, and in a boost for Merkel's chances of winning a second term in elections on September 27, Opel's new owners have pledged to keep open its four main plants in the country.
But with Magna expected to cut 10,000 jobs, elsewhere in Europe there were worries about where Opel's new owners would make the major cuts that analysts say are crucial for long-term survival.
Opel has about 7,000 employees in Spain, 4,700 at Vauxhall in Britain, 5,500 in Belgium, 1,800 in Italy, 1,600 in Austria and 1,500 in France, according to GM Europe's website.
GM vice-president John Smith said in Berlin on Thursday that Opel's new owners were "contemplating" winding down a plant at Antwerp, Belgium, and shifting some production from Spain to Germany.
Unions in Belgium expressed hope that a decision to close Antwerp had not yet been taken, and the head of the Flemish government called on the European Commission to probe Germany's state aid.
In Britain, Vauxhall workers were worried, with one telling the AFP: "I'm absolutely devastated, for the simple reason it doesn't secure the long-term future for this place. The morale is low."
A not-so-sweet victory for Merkel
For Germany's Chancellor Angela Merkel, securing an agreement with GM before the September 27 legislative elections was essential.
But the opposition are counting on not letting her transform the Opel deal into a political victory.
"It is a virtual rescue", said Green Party spokesman Renate Künast. Even the liberal FDP, a potential ally for Merkel's Christian Democrats in a future government, denounced the political manoeuvre, saying "the jobs are not saved at all."
German mass circulation daily Bild was also sceptical: "Who is going to pay? The German taxpayer ... Germany is carrying all the risk. Opel is not rescued yet by a long shot."
"German politicians may breathe a sigh of relief ... Voters should be more worried. They will pay a high price -- fiscally, economically and politically -- for short-term peace of mind," the Financial Times said.
Newspapers also raised concerns about the Kremlin's involvement, with Germany's Frankfurter Allgemeine saying that "no one knows what the Russians are really planning, what extra demands they will have."
Magna and Sberbank want Russian carmaker GAZ, owned by billionaire oligarch Oleg Deripaska, to use its plant in the city of Nizhny Novgorod to make Opels for the depressed Russian market.
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