GM U-turn on Opel stirs German fear and loathing

German Economy Minister Rainer Brüderle slammed GM's about-turn as "totally unacceptable" and the powerful labour unions immediately announced nationwide protests for Thursday. Home to nearly half of GM 55,000 European employees, Germany had pressed hard for a sale of the storied carmaker.

But the reaction was more muted elsewhere in Europe where GM units are located, with the Britain calling for early talks with the US auto maker and Spain expressing its "surprise." The European Union insisted that any government money made available to GM in a restructuring would have to comply with strict conditions.

German Chancellor Angela Merkel had offered €4.5 billion ($6.6 billion) in taxpayers' money to sweeten the sale to Canada's Magna International and Russia's Sberbank in an effort to rescue as many German jobs as possible.

But GM announced an abrupt U-turn on Tuesday, citing what it called "an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM's global strategy."

Merkel's spokesman, Ulrich Wilhelm, said she would likely be in contact with US President Barack Obama "in the coming days" and would make it clear that Berlin wanted back the €1.5 billion it has forked out in bridging loans.

The loan expires at the end of November. Germany had also offered Magna, which together with state-owned Sberbank was due to buy a 55-percent stake in Opel, €3 billion in loan guarantees.

Opel workers in Germany, who have seen their hopes raised and dashed repeatedly during the torturous months-long process, were both furious and anxious.

Axel Kraus, 19, on a training course at Opel's Rüsselsheim plant in western Germany, told AFP: "I am worried for my place on the course. They have just taken us for a ride over the last 12 months."

"For me, it was a complete catastrophe to hear the decision on the news today," said Dieter Mueller, who has been with the firm for 32 years. "Tomorrow, I'm going out on the streets."

The IG Metall union, one of Germany's biggest unions with 2.3 million members, said that nationwide protests on Thursday would be extended to other European countries a day later.

But the reaction in Britain, where Vauxhall employs 4,700 workers, was more one of relief as the sale to Magna was seen as safeguarding primarily German jobs and plants.

The British government, which had made no secret of its dislike of the Magna deal when it was first announced, said it would "work closely with GM to understand their plan for the business and what it means for the UK."

Business minister Peter Mandelson said he was "keen for very early discussions with GM over their plans for business and how they will affect British plants and workers."

British union Unite was delighted, welcoming an "incredible turnaround" for Vauxhall, with general secretary Tony Woodley telling the BBC he was "absolutely delighted that General Motors have finally done the right thing."

Russia, like Spain, expressed surprise, with a spokesman for Prime Minister Vladimir Putin saying Moscow would check the legality of the move.

But with GM saying it was planning a €3-billion restructuring plan for its European business, it was clear that even with Magna out of the picture, large numbers of jobs were still set to go. It is also likely that GM will seek money from European governments to help carry out its restructuring.

European Union authorities warned in Brussels that any government cash to support a future restructuring of GM's European operations would have to adhere to stringent conditions.

"The commission will verify that any financial support from member state governments for the new GM restructuring plan will be fully compliant with EU state aid and internal market rules," the European Commission said.

Meanwhile, at least one Opel worker in Germany was looking on the bright side.

"It's not all that bad. At the end of the day, we are staying in the family. It could be good for us," said Tamer Turma, who nonetheless admitted: "We are of course worried for our jobs."