• Germany's news in English

European anger ensures further twists in Opel saga

AFP · 11 Oct 2009, 09:28

Published: 11 Oct 2009 09:28 GMT+02:00

Facebook Twitter Google+ reddit

In a preliminary deal announced in Berlin with great fanfare on September 10, GM is selling a 55 percent stake to Canadian auto parts-maker Magna and Russian state-owned lender Sberbank.

Chancellor Angela Merkel's government, keen to safeguard the jobs of Opel's 25,000 German employees, half the total in Europe, agreed to sweeten the deal with €4.5 billion worth of public money.

Merkel was eager to secure a rescue before elections on September 27. She duly won a second term.

The financing was contingent, however, on other European governments where Opel has plants, such as Britain, Spain, Poland and Belgium, stepping up to the plate and providing their own taxpayers' money too.

Instead, the deal has been met with grumbling, with these countries unwilling to stump up cash for a deal that they see as only guaranteeing German jobs and keeping German plants up and running.

With Opel losing money fast, dependent on a market where too many cars are being made for too few customers, Magna is reported to be looking to take around 10,500 workers off the payroll.

British Prime Minister Gordon Brown's government, which has a far tougher re-election battle than Merkel waiting for it next year, has made clear that it is not amused.

Peter Mandelson, British business secretary, told the Financial Times in Seoul last Thursday he could not "sign off" on the deal in its current form, citing "shortcomings" identified in an independent auditors' report.

Britain, where Vauxhall employs 4,700 people, is ready to provide €400 million in loan guarantees, but first wants assurances that two plants in Luton and Ellesmere Port remain open, the FT said.

Spain, where Opel employs 7,000 people in Zaragoza province, has also been up in arms, with Industry Minister Miguel Sebastian boycotting a European meeting on Opel in Berlin on Friday.

"We have never been favourable to Magna's offer," a spokesman in Madrid said on Friday, with Sebastian "pretty unhappy" after the last get-together in the German capital.

Instead, Sebastian met with Magna boss Siegfried Wolf, appearing afterwards slightly more conciliatory, pledging to improve "communication problems" with the Canadian firm.

In Belgium, where Opel's Antwerp plant is seen as a prime target for closure, thousands of workers, including hundreds from Germany, held a mass protest last month. The plant employs around 2,500 workers.

Story continues below…

These countries have turned to EU headquarters in Brussels for help. EU Competition Commissioner Neelie Kroes is scrutinising the deal to determine whether Germany's state aid was contingent on German plants not being closed, which would make it illegal.

Germany, though, has expressed confidence that all will be well, and GM, Magna and Berlin reportedly want to sign a final deal this week. The transaction would then be completed by the end of November.

But analyst Tim Urquhart from IHS Global Insight said this aim was ambitious as long as there was no thumbs-up from the EU and no deal with unions on employees taking a 10-percent stake in "New Opel".

"I have said right from the start that there are still a lot of twists and turns to be done before this deal is completely signed off," Urquhart said.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
These are Germany's top ten universities
The new library of Freiburg University. Photo: Jörgens.mi / Wikimedia Commons

These are the best universities in all of Germany - at least according to one ranking.

Introducing Swabians - 'the Scots of Germany'
Photo: DPA

These Southern Germans have quite a reputation in the rest of the country.

Woman sues dentist over job rejection for headscarf
Photo: DPA

A dentist in Stuttgart is being taken to court by a woman whom he rejected for a job as his assistant on the basis that she wears a Muslim headscarf.

Isis suspect charged with scouting Berlin attack sites
Photo: DPA

German federal prosecutors said Thursday they had brought charges against a 19-year-old Syrian man accused of having scouted targets in Berlin for a potential attack by the Isis terror group.

Berlin Holocaust memorial could not be built now: creator
The Memorial to the Murdered Jews of Europe, in Berlin. Photo: DPA.

The architect of the Berlin Holocaust memorial has said that, if he tried to build the monument again today, it would not be possible due to rising xenophobia and anti-Semitism in Germany and the United States.

'Liberal' Germany stopping Europe's 'slide into barbarism'
Ian Kershaw. Photo: DPA

Europe is not slipping into the same dark tunnel of hate and nationalism that it did in the 1930s - mainly thanks to Germany - one of the continent's leading historians has said.

Eurowings strike to hit 40,000 passengers
Travelers impacted by the strike on Thursday wait at Cologne Bonn airport. Photo: DPA.

The day-long strike by a Eurowings cabin crew union is expected to impact some 40,000 passengers on Thursday as hundreds of flights have been cancelled.

Deutsche Bank reports surprise quarter billion profit
Photo: DPA

Troubled German lender Deutsche Bank reported Thursday a surprise €256-million profit in the third quarter, compared with a loss of more than six billion in the same period last year.

US 'warned Merkel' against Chinese takeover of tech firm
Aixtron HQ. Photo: DPA

The German government withdrew its approval for a Chinese firm to purchase Aixtron, which makes semiconductor equipment, after the US secret services raised security concerns, a German media report said Wednesday.

Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
jobs available
Toytown Germany
Germany's English-speaking crowd