Anger as sale of GM's European arm is delayed
Tuesday 25 August 2009
Frustration is building over General Motors's inability to conclude the sale of its European arm (GME), which includes Vauxhall in the UK and Opel in Germany.
The sale has dragged on for months already, and a GM board meeting on Friday again failed to decide between Canadian car parts maker Magna and private equity group RHJ International. The atmosphere is becoming increasingly febrile. Yesterday, the leader of Opel's works council threatened "spectacular measures" if GM does not select a buyer soon. "We have run out of patience," Opel labour leader Klaus Franz told Deutschlandfunk, a German radio station. Rumours also surfaced that GM's advisers in the US are now counselling the group to cancel the sale altogether. The company refused to comment.
On Sunday, Angela Merkel, the German chancellor, also called for a quick resolution to the saga. Berlin openly favours Russian-backed Magna, and will put up €4.5bn (£3.9bn) to lubricate an agreement. But GM is concerned about the ownership ratios of the deal, as well as its implications for its competitive position in Russia.
RHJ looks a better deal for Vauxhall's 5,000 UK jobs. RHJ is committed to keeping the factories at Luton and Ellesmere Port open, while Magna has merely said it has no immediate plans for closures in the UK.
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