GM: Deal is struck to save car maker Opel

The Telegraph ^ | 5/30/2009 | Andrew Alderson

[bruinbirdman]

A deal has been struck to save car manufacturer Vauxhall and Opel, the European wing of car giants General Motors.

An agreement was reached in the early hours of Saturday morning between the German government and Magna International, a Canadian car parts maker, that will see the firm take over most of GM Europe.

Under the terms of the deal, Germany is expected to provide an immediate loan facility of €1.5 billion (£1.3 billion).

However, it is still feared that 2,500 jobs in Germany could be lost and unions in the UK expressed fears that jobs in the UK could also be lost to reduce job cuts in Opel's German operation.

Vauxhall employs 5,500 people in the UK at plants in Ellesmere Port and Luton.

Lord Mandelson, the British Business Secretary, has said he is optimistic that Vauxhall will be saved by the deal. He said that magna has made it clear that they were committed to continued production in the UK.

But he accepted that there is "excess capacity" in GM's operations in Europe.

Speaking to the BBC after details of the deal emerged, Lord Mandelson said: "It looks as if GM in Europe can be saved, it can be turned around.

"Of course it will involve change, there is excess capacity."

He added that the UK is also prepared to consider offering loan guarantees to support the deal.

GM in the US is expected to declare bankruptcy on Monday. It has emerged that GM operations in Europe will be placed under the care of a trustee to shield them from the parent company's filing for bankruptcy.

The firm has been in talks with the German Government and two preferred bidders, Fiat and Magna International, to take over the European operations.

The breakthrough in the

[jongaltsr]

Still remember the Opel Cadet.
Had a friend while serving in Turkey *USAF*
He had a wife what weighed 360 lbs if she weighed a pound.
He was a 135 lb skinny rail.
His Opel Cadet always tilted to the right regardless of the direction of travel - left or right around corners.

[Joe Boucher]

Why save Opel?
This company has NEVER had a decent vehicle sort of like Yugo.

[realpatriot]

There's

And

[Joe Boucher]

real patriot,
How many of these remain on the road?
NO too many cause they rotted.

[realpatriot]

They ARE 40 years old, after all. And the bottom one, you may recognize as a 2008/09 Saturn Sky.

[bert]

The proceeds of this sale belong to secured creditors

[mitchbert]

This could get really interesting. Magna is owned by Frank Stronach and is based north of Toronto. Frank also until recently owned several major US horse racing venues and is the father of former member of Parliament Belinda Stronach. Magna parts are widely used by several auto companies, both foreign and domestic, that manufacture in North America. There's a better than average chance that many interior and system parts in any car bought recently in Canada or the US were made by them. Assembling a complete auto for them should not be much more of a stretch than consolidating stuff they already do on a single platform.

I strongly suspect we may see a rebirth of these brands in North America in the coming years, with models unlike anything they had before. Stronach has a habit of solid success, and he built the business from nothing.