GM has cancelled the sale of Opel and Vauxhall to Magna
In a surprise turnaround GM has this morning announced that it is cancelling the sale of its European division, including Vauxhall and Opel, to Canadian parts maker Magna.
It’s been fraught with problems from the start, but what fire-sale isn’t? The unions have been unimpressed with what Magna were offering. The EU has had a pout and a stomp about the sale. Lord Mandy has said lots but done little. So this morning GM has decided it’s going to hang on to its European business after all.
The press release from GM started out with “Given an improving business environment for GM over the past few months, and the importance of Opel//Vauxhall to GM’s global strategy, the GM Board of Directors has decided to retain Opel and will initiate a restructuring of its European operations in earnest.”
Which should please the unions (in fact the UK unions are saying this is the best result possible) and take away the grief from the EU regulators. But the cuts are still going to come. GM has stated they have set aside €3 million for restructuring costs in Europe, and they are expected to shed at least 10,000 jobs and reduce the overall size of Vauxhall/Opel by 30%.
It seems that now GM is out of bankruptcy it is able to use the bailout funds it received from the US Government outside the US (it was barred before) and this, couple with likely financial aid over GM Europe from Germany and the UK, makes it viable for GM to retain their business.
We’ll have to wait to see how this pans out.
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