Magna to cut 4,000 Opel jobs in Germany
Published on: 14 Sep 2009 16:35 CET
Co-chief executive Siegfried Wolf said his group, which agreed last week to buy a majority stake in Opel from General Motors, was sticking with plans to eliminate around 10,000 jobs at Opel and its sister brand Vauxhall in Britain.
He confirmed figures reported over the weekend in the German media but said Magna had not modified its terms since late May, when it first signed a memorandum of understanding with GM on the deal.
"We've always spoken of 10,500 jobs in Europe," Wolf told reporters at a press briefing in Frankfurt ahead of the international auto show. "Of that, 4,000 positions are acutely affected in Germany."
The Opel operations, including Vauxhall, employs some 50,000 workers across Europe.
Only one Opel plant - located in Antwerp, Belgium - will be closed in Magna's restructuring efforts, Wolf said.
German Economy Minister Karl-Theodor zu Guttenberg told the Sunday newspaper Bild am Sonntag that he believed the cuts were deeper than those estimated earlier by Magna.
GM said last week that it would sell a 55-percent stake in Opel to a consortium comprised of Magna and the state-owned Russian lender Sberbank. GM will retain 35 percent of Opel and employees the rest.
Financial details of the deal were not disclosed and GM noted that key details still had to be agreed upon. Wolf said he expect the deal to be inked within the next two weeks.
Wolf also stressed Monday that Opel could be made profitable again by 2015 and dismissed allegations that Magna would invest €600 million ($870 million) of German taxpayers' money in Russia.
Germany has extended a bridging loan worth €1.5 billion to keep Opel going until the takeover is completed, along with loan guarantees worth another €3 billion to get the new company started.
Other European Union countries with Opel plants, such as Britain, Poland and Spain, are worried that Germany's generous aid may mean German jobs take preference and that it could breach European Union rules on state aid. Germany is seeking support from the other countries meanwhile to eventually reduce its own contribution.
Opel is expected to struggle in a sluggish global auto industry where in Europe and North America too many cars are being made for too few customers. But the Magna boss stressed that the deal opens the way for Opel to grow in Russia, which hopes to overtake Germany as Europe's biggest car market.