Deal struck to save Opel

• Source: Xinhua
• [09:40 May 31 2009]
• Comments

Two people walk past an exhibition hall of Opel auto in Berlin, Germany, May 30, 2009. A deal has been reached for the Canadian auto parts maker Magna to take over General Motor's Opel. (Xinhua/Luo Huanhuan)

GM had sought more money while Berlin was looking for assurances that taxpayer money invested in Opel would remain in Germany.

Steinbrueck said there would be no additional financing from the federal government in Berlin, even with parliamentary elections looming.

The government is eager to show it will not be subject to "extortion," he said.

Siegfried Wolf, a co-CEO of Magna, said he believed the agreement with GM will be signed in five weeks' time, despite the fact that there were still some more details to be settled.

Germany-based Opel was founded in 1863, and it began making automobiles in 1899. During the Great Depression in 1929, Opel was acquired by GM.

GM Europe, which includes the Opel unit, employs a total of 55,000 people.

Nearly half are employed in Germany at Opel plants in Bochum, Eisenach, Ruesselsheim and Kaiserslautern.

Magna, which has 70,000 employees at 326 plants in 25 countries and supplies components and systems to many of the world's leading carmakers, wants to use Opel to enter the Russian market.

German Vice-Chancellor and Foreign Minister Frank-Walter Stein Meier, who is the main rival of Merkel in the upcoming general elections in September, said he was satisfied with the deal.

"Nobody can exclude all risks in the future, but I think we have really a responsible solution," he said.

Juergen Ruettgers, Prime Minister of North Rhine-Westphalia, where Opel's Bochum factory is located, described the agreement as a viable solution.

GM Europe chief Carl-Peter Forster said Opel has been rescued.

"This is the beginning of a new future for Opel, the staff and the brand," he said.

Fiat, meanwhile, has now turned its attentions to a deal with Chrysler and is awaiting a US court's decision. Fiat is looking for a 20 percent stake in Chrysler.