GM decides to keep European Opel unit
BY THE ASSOCIATED PRESS
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Published: November 4, 2009
DETROIT — General Motors Co. said Tuesday it will restructure its European Opel unit instead of selling 55 percent to Canadian auto parts maker Magna International and Russian lender Sberbank.
GM’s board of directors made the decision after finding that a $4.43 billion restructuring plan was significantly lower than bids for the division.
GM CEO Fritz Henderson added that
Europe’s business environment and GM’s overall health have improved since it put the division up for sale.
The decision ends a year of uncertainty for the troubled Opel brand and its English sister, Vauxhall.
The move came even though Opel’s unions on Tuesday reached agreement with Magna for $390 million a year in cost cuts. Henderson said it will work with Europe’s unions "to develop a plan for meaningful contributions to Opel’s restructuring.”
GM, which has lost more than $80 billion in the last four years and has received about $50 billion from the
U.S. government, had announced plans to sell Opel to focus on more profitable areas, including
Latin America and
Asia.
GM Europe employs 54,000 workers in total and sells Opel and Vauxhall cars as well as Cadillac and Chevrolet. It reported a pretax loss of $1.6 billion in 2008, compared with a profit of $55 million the year before.
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