G.M. Agrees to Sell Opel to Magna, With Strings

BERLIN — General Motors told the German government Thursday that it had decided to sell a majority stake in its unprofitable European operations as agreed last spring — on condition that the government and labor unions pledged to help with the “necessary” restructuring.

Chancellor Angela Merkel of Germany, who is up for re-election in less than three weeks, was quick to claim credit for clinching the potentially job-saving deal even though she had, at times, been skeptical of government rescues during the past year’s financial and economic crisis.

“This has shown that the patience and single-mindedness of the federal government has paid off,” Mrs. Merkel said at a news conference.

But G.M. stressed that it still needs union agreement — in writing — for the restructuring of the four Opel plants in Germany, which employ almost half of G.M. Europe’s 55,000-strong European work force. The powerful IG Metall union said that it expected the negotiations to be “tough.”

And the German

government has not yet said how much public money it will commit. It had originally pledged over €4.5 billion, or $6.5 billion, in loan guarantees. Members of the trust overseeing the sale of Opel were sharply divided over the accord, with some criticizing the amount that the German taxpayer would have to provide in order to save Opel.

source: nytimes