Fears grow over General Motors' Magna deal

The Telegraph ^ | 10/11/2009 | Graham Ruddick

[bruinbirdman]

American car maker agreed to sell a majority stake in GM Europe to Canadian automotive group Magna after filing for bankruptcy protection in June.

In a sign that the deal could still collapse, GM has said it wants to see progress on talks with European governments about funding and job cuts by the end of the week, according to sources close to the talks.

Although they insist GM is confident a deal can be done, the company is keeping on the table the alternative plans it drew up for Opel and Vauxhall before agreeing to the Magna deal, such as selling the units to investor RHJ International.

Opel and Vauxhall are currently being propped up by a €1.5bn (£1.4bn) bridging loan from Germany.

But a major row has broken out over whether Germany's financial support for Magna's acquisition of a 55pc stake in GM Europe, which totals €4.5bn, has influenced where the job cuts are made.

Spain and the UK have both indicated they will not financially support Magna's restructuring plans in their present form, which envisage 10,500 job cuts.

Lord Mandelson, the Business Secretary, believes Magna's proposals have "shortcomings".

Up to 1,200 jobs could go in the UK, about a quarter of the workforce, compared to 16pc of Germany's 25,000 GM workers.

Magna wants to cut capacity at the Ellesmere Port plant to 120,000 cars a year from 180,000, despite the plant being widely considered to be one of GM's most efficient in Europe.

Unions and the Government are pressing for 150,000 cars a year, which could save a substantial number of jobs.

The company denied reports at the weekend that Magna had already decided not to build its electric hybrid car, the Ampera, at Ellesmere Port.

[umgud]

Unions and the Government are pressing for 150,000 cars a year, which could save a substantial number of jobs.

Unions and gov't? ........ say no more.

[allmost]

GM has said it wants to see progress on talks with European governments about funding and job cuts by the end of the week

They ran their business into the ground, went bankrupt, take over 2 billion dollars in government welfare (theft), and sit back and make demands?

[Eagles2003]

Magna is run by Frank Stronach out of Canada and the horseracing part of this company was spun off and went into bankruptcy.

It’s an auto parts company nothing more. His daughter was screwing around with Klintoon. She also went from conservative to liberal, IMHO she has not shown good judgment. Same as her father.

[Cringing Negativism Network]

GM Saturn: kaput.

GM Hummer: Communist Chinese.

GM Europe: Sold to foreigners.

Once the government is done “saving” GM, Ford will be the only US automaker left.

[kennyboy509]

the union and the goverment own it.

They are the onesmaking demands.

[kennyboy509]

the union and the goverment own it.

They are the onesmaking demands.

[bruinbirdman]

"GM Saturn: kaput.
GM Hummer: Communist Chinese.
GM Europe: Sold to foreigners.
"

GM = nationalized

yitbos

[NTHockey]

I worked for Magna - it was a six month marriage. The Controller they hired stole $75K+ in 3 months and got caught. He gets fired, Magna gets booted and that was that. Oh, I was the schlub that had to find out how much was stolen.