GM decision on Opel looms; reports say no sale

[September 10, 2009]  FRANKFURT (AP) -- Opel's workers council said Thursday that General Motors Co. would announce its decision later in the day on the future of the unit. A British media report said GM intended to keep the European automaker rather than sell it.

A decision to keep Opel could trigger worker discontent in Germany and set up a confrontation with the German government, which faces national elections Sept. 27 and has pushed for a sale to Canadian parts maker Magna International in order to preserve jobs.

Top worker representative Klaus Franz said on ZDF television that a press conference was set for later Thursday in Germany but that he did not know the decision.

"A decision is coming, but what's more important is what the decision is," Franz said.

Franz underlined the German government and Opel employees' preference for Magna's bid. Magna signed an agreement with the government and GM earlier this year which kept it solvent.

Franz argued that deal should be honored and blamed the U.S. carmaker for driving Opel into "this disaster."

He threatened widespread protests, including organizing "many thousands" of Opel workers to form a human chain around Opel's Eisenach plant Friday if the decision goes any other way than Magna's.

"We won't support this plan from GM," he said about the possibility of Opel remaining with GM, which could mean plant closings.

Neither General Motors Europe, Opel or the Opel Trust would onfirm that any decision had been made.

Britain's Press Association, citing sources, reported that GM was set to keep Opel, a move which it said would ease the threat of job losses at Opel's Vauxhall plants in Britain. Unions in the U.K had feared heavy job losses among the 5,500 workers at Vauxhall's factories in Luton and Ellesmere Port.

Opel employs 25,000 people in Germany, about half of GM Europe's total work force. Workers there fear job losses and plant closings.

"Most have given up hope," Burkhard Aust, an Opel worker at the Bochum plant told The Associated Press during a morning shift change. "Whether GM decides on an investor or to keep Opel for itself, Bochum is going to bleed."

GM's new board has apparently already decided what to do but will not go public with the decision until officials in Berlin and Opel's board are notified early Thursday, a person familiar with the situation said.

The 13-member GM board met Tuesday and Wednesday and weighed four options for Adam Opel GmbH, including keeping the operation or letting it slide into bankruptcy protection, said the person, who requested anonymity because of the sensitive nature of the decision.

Board members also discussed whether GM should accept bids from the consortium of Magna International Inc. and Russian bank Sberbank, or a competing offer from RHJ International, a Brussels-based investment house.

Any GM board recommendation would have to be approved by the Opel Trust. Control of the company was transferred to the trust just ahead of GM's U.S. filing for bankruptcy protection to keep the company's assets from being drawn into the bankruptcy case. The trust holds 65 percent of Opel, with GM holding 35 percent.

Under the terms of the Magna bid, Magna and Sberbank would get a 55 percent stake in Opel. GM would hold onto a 35 percent stake and Opel workers would get 10 percent.

GM for months has stated its preference for the RHJ bid because the private equity firm is more likely to restructure Opel while preventing GM's car designs and technologies from landing in the hands of competitors. State-owned Sberbank has ties to Russian automaker GAZ, and GM is worried the Russian automaker could use Opel technology to compete with Chevrolet, which has grown in Russia.

If the board goes with RHJ or decides to keep Opel, it would be setting up a confrontation with the German government, which has offered euro4.5 billion ($6.5 billion) in credit to support the Magna bid.

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On the Net:

http://www.opel.com/

http://www.gm.com/

[Associated Press; By GEORGE FREY and TOM KRISHER]

Krisher reported from Detroit.

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