Workers push GM to sell Opel to Canada's Magna

• Source: Gasgoo.com
• [11:29 August 25 2009]
• Comments

Opel workers plan to pressure General Motors Co. into accepting an offer to sell a majority stake to a group led by Canada's Magna International Inc., a labor representative on the unit's supervisory board said.

"The parent needs to understand that there's no going back," Armin Schild, an official with the IG Metall union, said today in an e-mail. "Neither the continuation of the waiting game aimed at the unit's insolvency nor a return to ‘un-independence' will be accepted without opposition."

GM's advisers are recommending that the board consider spurning a German-government backed sale of Opel in order to retain a bigger presence in Europe and Russia, a person familiar with the discussions said. The advisers suggest GM seek aid from other European countries to retain ownership of the division as an alternative to surrendering control, the person said.

GM's new board, dominated by members appointed after the Obama administration forced the company into bankruptcy, is questioning the decision made by previous directors to give up control of Opel. The 13-member body didn't reach any conclusions on an investor for the unit in meetings on Aug. 4 and August 21, something Schild said was "irresponsible."

Lost Opportunity

The delay is a setback for German Chancellor Angela Merkel, who is pressing for a quick resolution. Unions are also concerned that an opportunity to secure the independence from GM of Opel, which is based near Frankfurt, may be lost if a deal isn't agreed before federal elections on September 27.

Magna, along with Russian partner OAO Sberbank, is competing for a majority stake in the maker of the Astra compact against Brussels-based RHJ International SA. Opel is surviving on a 1.5 billion-euro ($2.1 billion) loan from the German government, which has said it's ready to back a 4.5 billion-euro plan from Magna that would leave GM with 35 percent ownership.

Union leaders plan to decide on protest plans tomorrow, according to Schild's office. German newspaper Bild reported today that workers may rally this weekend in front of the US Embassy, which is next to the Brandenburg Gate in Berlin.

Schild said that neither RHJ nor GM have the trust of Opel's 55,000 employees in Europe, while a GM-Opel-Magna deal is "signature ready" and would represent a "win-win-win."

"We're not going to be led around by the nose any longer," said the official, who heads Germany's largest labor union in Opel's home state of Hesse. "We can also act differently and we're going to show it."

(Bloomberg)