General Motors reverses Opel/Vauxhall sale
General Motors has reversed its decision to sell its Vauxhall/Opel brand in Europe to Canadian group Magna International and its partners.
The car manufacturer says that given an improving business environment for GM over the past few months, and the importance of Opel//Vauxhall to GM’s global strategy, its Board has decided to retain Opel and will initiate a restructuring of its European operations “in earnest”.
The original plan was to sell 55% of Opel/Vauxhall to Magna, subject to “definitive agreements.”
A new ownership structure would have seen employees hold a 10% stake in Opel and GM retain a 35% stake.
“GM will soon present its restructuring plan to Germany and other governments and hopes for its favourable consideration,” said Fritz Henderson, president and CEO. “We understand the complexity and length of this issue has been draining for all involved.
“However, from the outset, our goal has been to secure the best long term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”
The GM plan could see total restructuring expenses of about € 3 bn (£2.67 bn), significantly lower than all bids submitted from potential investors.
.GM will work with all European labour unions to develop a plan for “meaningful contributions” to Opel’s restructuring.
Henderson says: “While strained, the business environment in Europe has improved. At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.
We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We’re also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement.”
