Posted on 11/03/2009 8:55:33 PM PST by bruinbirdman
General Motors last night staged a dramatic U-turn by choosing to hold on to its European Opel and Vauxhall subsidiaries in a major snub to Magna International and the German government.
The surprise decision by GM places a further question mark over the future of the companys van plant at Luton, which employs around 1,500 workers, but is likely to safeguard the future of its Ellesmere Port facility, where it employs about 2,000 workers.
The 11th-hour volte-face, made during a GM board meeting in Detroit, is understood to have come as a result of the potential threat to the Magna deal by Neelie Kroes, the European competition commissioner, who could have blocked it over the validity of 4.5bn (£4bn) of state aid being offered by Germany.
In addition, GMs board is believed to have concerns about the potential for protracted disputes with other European governments over the German-backed solution for Opel, which would have seen Magna take a 55pc stake in the business.
Instead, Fritz Henderson, GM chief executive, citing the companys own improving financial situation as a result of its Chapter 11 financial restructuring, said the company will set out a 3bn restructuring plan within the next few weeks.
Mr Henderson said holding on to its European businesses was the most stable and least costly approach for securing Opel/Vauxhalls long-term future.
The restructuring will be funded through European loan guarantees from individual governments, with a Department for Business spokesman saying the Government would be willing to provide funding to this if it proves to be the right long-term sustainable solution. A spokesman for trade union Unite said the decision was great news.
GM will now have to repay a 1.5bn German bridging loan by the end of November.
Magna and the German authorities declined to comment.
(Excerpt) Read more at telegraph.co.uk ...
I may be wrong but I think I heard that Vauxhall is a big seller in England.....
I may be wrong but I think most of GM's non US sales are and have been good. (heck, their best US 'division' was GMAC and they sold that off first!)
I guess between the government standards and the unions it was a no go.
Did they check with Chairman Baraq? He is wise.
Nah, more 'upper' mgt. (I have a few years w/the company)
They believed they knew what we wanted to buy (and if we didn't they'd tell us).
Take a peek at GM's website. They USED to show all of their brands and products (Trains to washing machines, US and Foreign). I used to get it in the yearly prospectus' (those cost a mint to make/send out too!)
Eh, not a night to yak about that... to much other GOOD news to read about. later
Government Motors strikes again.
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