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| General Motors cancels Opel sale | General Motors cancels Opel sale |
| (20 minutes later) | |
| General Motors (GM) has cancelled plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall. | |
| The US giant said in a statement that its board had made the decision because of "an improving business environment for GM over the past few months". | The US giant said in a statement that its board had made the decision because of "an improving business environment for GM over the past few months". |
| GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna. | GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna. |
| The Magna deal had the backing of the German government, which had pledged 4.5bn euros ($6.7bn; £4bn) of loans. | The Magna deal had the backing of the German government, which had pledged 4.5bn euros ($6.7bn; £4bn) of loans. |
| GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy. | GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy. |
| It said it would now "initiate a restructuring of its European operations in earnest" and seek aid from the German government, and other European states. | It said it would now "initiate a restructuring of its European operations in earnest" and seek aid from the German government, and other European states. |
| However, its decision is likely to cause much anger in Europe, where the planned sale of Opel has been dragging on for months. | However, its decision is likely to cause much anger in Europe, where the planned sale of Opel has been dragging on for months. |
| Magna has made no comment. | |
| Changed fortunes | Changed fortunes |
| GM first said in March that it wished to offload Opel and Vauxhall, before finally agreeing to sell to Magna in September. | GM first said in March that it wished to offload Opel and Vauxhall, before finally agreeing to sell to Magna in September. |
| GM never really wanted to get rid of Opel, they were being forced into it because of their financial situation Aaron Bragman of IHS Global Insight | GM never really wanted to get rid of Opel, they were being forced into it because of their financial situation Aaron Bragman of IHS Global Insight |
| The US giant's decision to sell its main European business was made after it was forced to announce a group-wide loss of $30.9bn for 2008, after its sales plummeted in the global recession. | The US giant's decision to sell its main European business was made after it was forced to announce a group-wide loss of $30.9bn for 2008, after its sales plummeted in the global recession. |
| However, aided by financial support from the US government, and a brief period in US bankruptcy protection in June and July of this year, GM has since managed to turn around its fortunes. | However, aided by financial support from the US government, and a brief period in US bankruptcy protection in June and July of this year, GM has since managed to turn around its fortunes. |
| Earlier on Tuesday it said its US sales had risen in September for the first time in almost two years. | Earlier on Tuesday it said its US sales had risen in September for the first time in almost two years. |
| It is in this context that it now wishes to hold onto Opel and Vauxhall. | It is in this context that it now wishes to hold onto Opel and Vauxhall. |
| Car analysts said they were not too surprised by GM's announcement. | Car analysts said they were not too surprised by GM's announcement. |
| "GM never really wanted to get rid of Opel, they were being forced into it because of their financial situation," said Aaron Bragman of IHS Global Insight. | "GM never really wanted to get rid of Opel, they were being forced into it because of their financial situation," said Aaron Bragman of IHS Global Insight. |
| "A lot of GM cars have come out of Opel's engineering, so Opel provides a very useful service for GM globally. | "A lot of GM cars have come out of Opel's engineering, so Opel provides a very useful service for GM globally. |
| "Maintaining that foothold there is something that is beneficial for GM in the long run." | "Maintaining that foothold there is something that is beneficial for GM in the long run." |
| GM's decision? | GM's decision? |
| However, the German media is already questioning how easy it will be for GM to simply cancel the sale agreement. | However, the German media is already questioning how easy it will be for GM to simply cancel the sale agreement. |
| See GM production centres in EuropeEnlarge Map | See GM production centres in EuropeEnlarge Map |
| This is because when GM went into administration, ownership of Opel and Vauxhall was transferred to a trust, headed by two representatives of GM, two from the German government and one independent panel member. | This is because when GM went into administration, ownership of Opel and Vauxhall was transferred to a trust, headed by two representatives of GM, two from the German government and one independent panel member. |
| German newspapers has speculated whether it is this trust and not GM that will have to make the final decision. | German newspapers has speculated whether it is this trust and not GM that will have to make the final decision. |
| Opel employs a total of 54,000 workers across Europe, with 25,000 based in Germany. | Opel employs a total of 54,000 workers across Europe, with 25,000 based in Germany. |
| In the UK its Vauxhall brand employs 5,500 people across two plants in Luton and Ellesmere Port. | In the UK its Vauxhall brand employs 5,500 people across two plants in Luton and Ellesmere Port. |
| GM's decision to cancel the sale of Opel and Vauxhall will undoubtedly cause great anxiety and annoyance to Unite, the main union at Vauxhall. | GM's decision to cancel the sale of Opel and Vauxhall will undoubtedly cause great anxiety and annoyance to Unite, the main union at Vauxhall. |
| This is especially the case after Unite and Magna reached a deal last month limiting job cuts at the two factories to just 600 people, and all through voluntary redundancy. | This is especially the case after Unite and Magna reached a deal last month limiting job cuts at the two factories to just 600 people, and all through voluntary redundancy. |
| The Unite union has declined to comment on GM's U-turn. | The Unite union has declined to comment on GM's U-turn. |
| The decision to sell Opel to Magna had been controversial because of the German government's offer of the 4.5bn euro loans. | The decision to sell Opel to Magna had been controversial because of the German government's offer of the 4.5bn euro loans. |
| The European Commission warned last month that Berlin's offer of this aid may breach European competition rules because there were "significant indications" the German government had only been offering the money if Magna's bid was successful, and not that of rival suitor, Belgian investment fund RHJ. | The European Commission warned last month that Berlin's offer of this aid may breach European competition rules because there were "significant indications" the German government had only been offering the money if Magna's bid was successful, and not that of rival suitor, Belgian investment fund RHJ. |
| The German government immediately denied any wrongdoing. | The German government immediately denied any wrongdoing. |