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Opel and Vauxhall to go to Magna Opel and Vauxhall to go to Magna
(20 minutes later)
General Motors (GM) has announced that it has chosen the Canadian car parts manufacturer Magna to buy Opel and its sister company Vauxhall.General Motors (GM) has announced that it has chosen the Canadian car parts manufacturer Magna to buy Opel and its sister company Vauxhall.
The decision was welcomed by German Chancellor Angela Merkel, who said she was "very pleased" about it.The decision was welcomed by German Chancellor Angela Merkel, who said she was "very pleased" about it.
Magna, which is backed by Russia's Sberbank, has said that it will keep all four German plants open.Magna, which is backed by Russia's Sberbank, has said that it will keep all four German plants open.
But British unions have expressed concern about the future of Vauxhall's 5,500 UK workers.But British unions have expressed concern about the future of Vauxhall's 5,500 UK workers.
A spokesman for Magna said that the company is committed to keeping open the Ellesmere Port plant, where the Astra is made.A spokesman for Magna said that the company is committed to keeping open the Ellesmere Port plant, where the Astra is made.
The Opel Trust, which owns 65% of GM's European operations, approved the deal saying it "strongly" believed it was "in the best interests of Opel and Vauxhall and their employees".
Uncertainty continuesUncertainty continues
ANALYSIS By Jorn Madslien, Business reporter, BBC NewsANALYSIS By Jorn Madslien, Business reporter, BBC News
Victory for German Chancellor Angela Merkel in the lengthy tug-of-war over the future of Opel should go a long way towards safeguarding the jobs of most, if not all, of the company's 25,000 workers in Germany.Victory for German Chancellor Angela Merkel in the lengthy tug-of-war over the future of Opel should go a long way towards safeguarding the jobs of most, if not all, of the company's 25,000 workers in Germany.
But although the sale of a controlling stake to Magna is backed to the tune of 4.5bn euros (£4.5bn; $6.5bn) by the German government, it does not remove the need for sharp cost-cuts elsewhere.But although the sale of a controlling stake to Magna is backed to the tune of 4.5bn euros (£4.5bn; $6.5bn) by the German government, it does not remove the need for sharp cost-cuts elsewhere.
The sale signals the start of a restructuring process, with an expected 10,000 out of 50,000 Opel and Vauxhall jobs in Europe being axed.The sale signals the start of a restructuring process, with an expected 10,000 out of 50,000 Opel and Vauxhall jobs in Europe being axed.
Chancellor Merkel has said she will discuss with its European partners "the distribution of the burden", which probably means that any European government wanting to safeguard jobs in their country must also come up with substantial amounts of cash. Chancellor Merkel has said she will discuss with its European partners "the distribution of the burden", which probably means that any European government wanting to safeguard jobs in their country must also come up with substantial amounts of cash. class="" href="/2/hi/business/8248979.stm">Vauxhall deal raises job concerns
He added that the company plans to honour its existing contract to produce vans in Luton until 2013 and will try to find a way to keep the plant in production after that date.He added that the company plans to honour its existing contract to produce vans in Luton until 2013 and will try to find a way to keep the plant in production after that date.
"The uncertainty surrounding the ownership of Vauxhall is now over, but the uncertainty surrounding the long-term future of Britain's plants will continue," said Tony Woodley, general secretary of the Unite union."The uncertainty surrounding the ownership of Vauxhall is now over, but the uncertainty surrounding the long-term future of Britain's plants will continue," said Tony Woodley, general secretary of the Unite union.
"We need to make sure that British plants and people are not treated disproportionately during the restructuring that will take place.""We need to make sure that British plants and people are not treated disproportionately during the restructuring that will take place."
GM will be selling a 55% stake in the new Opel to Magna and Sberbank. Employees will hold a 10% stake and GM will keep the rest.GM will be selling a 55% stake in the new Opel to Magna and Sberbank. Employees will hold a 10% stake and GM will keep the rest.
A statement from GM said that several key issues still needed to be finalised, including written agreement from unions to support its cost-cutting programme. In trust
GM said it also needed to finalise a financing package from the German government. The Opel Trust, which currently controls that 65% of GM's European operations, approved the deal saying it "strongly" believed it was "in the best interests of Opel and Vauxhall and their employees".
Unite's Tony Woodley: "I would have preferred GM to keep ownership of the companies" Speaking about German government financial support, Trust chairman Fred Irwin said they had "recommended - given the burden on German taxpayers - and for the sake of German jobs - that guarantees be used for Opel and not others".
The carmaker will give more details of the deal at a news conference later in the day. A statement from GM said it needed to finalise a financing package from the German government.
BBC business correspondent Martin Shankleman said that this was the option that the GM board appeared to be resisting. Other issues outstanding included written agreement from unions to support its cost-cutting programme, GM said.
The UK unions were also against it as they feared the UK could be at the forefront of any job losses, he said.
UK unions favoured GM keeping control of Vauxhall - saying this would be the best news for British jobs.
'Considerable boost''Considerable boost'
Chancellor Angela Merkel said that "patience" during the long-running discussions had led to a decision being reached.Chancellor Angela Merkel said that "patience" during the long-running discussions had led to a decision being reached.
BBC Berlin correspondent Steve Rosenberg said this was a victory for the German chancellor who had staked her reputation on closing the deal.BBC Berlin correspondent Steve Rosenberg said this was a victory for the German chancellor who had staked her reputation on closing the deal.
It is a considerable boost for her and her centre-right party just two weeks before the national election, our correspondent said.It is a considerable boost for her and her centre-right party just two weeks before the national election, our correspondent said.
See GM production centres in EuropeEnlarge MapSee GM production centres in EuropeEnlarge Map
The German-led Opel Trust has controlled the European operations since GM sought bankruptcy protection in the US in June this year.The German-led Opel Trust has controlled the European operations since GM sought bankruptcy protection in the US in June this year.
It contains representatives from GM, the German federal government and the German states that contain Opel plants.It contains representatives from GM, the German federal government and the German states that contain Opel plants.
The rival offer came from the Belgian investment group RHJ.The rival offer came from the Belgian investment group RHJ.
Opel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.Opel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.
Its Vauxhall brand employs 5,500 people in the UK, primarily at its two British plants in Luton and Ellesmere Port.Its Vauxhall brand employs 5,500 people in the UK, primarily at its two British plants in Luton and Ellesmere Port.
GM in the US emerged from 40 days of bankruptcy protection in July, based on a plan involving disposing of many of its brands. It is now 61% owned by the US government.GM in the US emerged from 40 days of bankruptcy protection in July, based on a plan involving disposing of many of its brands. It is now 61% owned by the US government.
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