General Motors (GM) has been warned by the German Government it will need to raise the money itself to refinance Opel after the US car group scrapped plans for a sale of its European business to Magna, the Canadian car parts maker and Russia’s Sberbank
The reversal by GM’s board this week has enraged the governments of both Germany and Russia, who had hoped that Magna would act to protect more jobs if it acquired the European business, which also includes Britain’s Vauxhall.
Rainer Bruederle, Germany’s Economy Minister, told GM that it was responsible for restructuring the Opel business, which employs about 25,000 people in Germany.
The German Government had previously offered €4.5 billion (£4.1 billion) in state aid to Opel if the company was sold to Magna. The rejection is a blow for GM, which had said this week it would still be seeking state aid.
GM plans to cut Opel’s staff by 20 per cent and had earlier warned that its European arm might go bankrupt if employees did not agree to drastic cost cuts.
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The decision has roused anti-American feelings in Germany — in contrast to Britain, where workers at Vauxhall have been delighted by GM’s decision not to sell its European arm.