German workers to strike, government to take back aid in response to GM's decision

[Bravada]

German indignation over GM decision to keep Opel

**** Scroll down for an update by TuffG929 ****

Source: The Associated Press

BERLIN — Opel labor representatives called for work stoppages across Europe to protest General Motor Co.'s decision not to sell its European subsidiary, and Germany's government vowed to recover euro1.5 billion ($2.2 billion) it loaned GM to finance the sale.

Klaus Franz, Adam Opel GmbH's top employee representatives, said workers would walk out starting Thursday in brief, so-called "warning strikes" over GM's decision to call off a deal with Canadian parts maker Magna International Inc. and Russian lender Sberbank.

Opel's employee council on Tuesday said that European workers had agreed with Magna to offer cost-cutting contributions worth euro265 million a year. In Germany, workers had agreed to forego pay increases through 2011 and give up part of their traditional Christmas and summer bonuses.

The industrial union IG Metall also criticized GM's decision.

"This is an unbelievable action," Berthold Huber, the union's president, said. "Opel has been brought to this difficult situation, through years of mistakes by GM's management. Therefore, it's not likely that GM will be able to produce a viable solution" for Opel.



German Economy Minister Rainer Bruederle, speaking to reporters ahead of a government meeting to discuss GM's decision to keep its European subsidiary, Adam Opel GmbH, and not sell a 55 percent stake to a Canadian-Russian consortium, said the money spent to encourage Opel's sale to the consortium would be recovered.

"We will get back taxpayers' money," he said Wednesday, referring to the bridge loan the government gave Opel last year to keep it afloat until Canadian auto parts maker Magna International Inc. and its partner Russian lender Sberbank could take it over.

"I expect (GM) to lay its restructuring plans on the table as quickly as possible," said Bruederle, who took over the post of economy minister last month, after Chancellor Angela Merkel's re-election.

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More from TuffG929

Germany Fumes Over General Motors Ditching Opel Sale to Magna

Originally Posted by Detroit News

Berlin -- Germany's politicians fumed with anger and Opel workers canceled cost concessions and readied walkouts after General Motors Co. abandoned the sale of its European subsidiary to parts maker Magna International and Russian lender Sberbank.

Klaus Franz, Adam Opel GmbH's top employee representative, called it a "black day" and said workers would start brief work stoppages Thursday.

GM's decision Tuesday to abandon the deal was a sharp blow to government and labor officials who supported it as the restructuring option that would save the most jobs in Germany.

The German government had put up a euro1.5 billion ($2.2 million) bridge loan to keep Opel afloat as a buyer was sought, and promised euro4.5 billion in further financing so Magna International Inc. and Sberbank could take a 55 percent stake.

Magna had said it planned to cut about 10,500 of the 50,000 Opel jobs in Europe, with less than half the job cuts, or around 4,500, in Germany. It also said it would keep all four German plants open.

With the deal now off, German workers face the prospect of a restructuring that is less favorable to them...

Detroit News

Autoblog

Automotive News

[packardlust]

I think the evidence is quite clear that Magna was not GM's first choice, but were forced into it by the German government and unions. The rest of the EU cried foul. Now, today, the Germans don't get Opel, what they wanted, what they thought was rightfully theirs, what they have for years treated as their own, yet. The German government tried to steam roller over the rest of the EU countries. This will be an interesting outcome, regardless of who wins.

[boston boy]

It's understandable, if you invest 2.2 billion you would think you got something too...

[Quest]

I’ve already stated this before, one more time:

The Crux of the matter is this: Magna is finding it very difficult to make the cuts necessary to employment and operations needed for an Opel turnaround to be possible. There is little likelihood of the Russian market turning around soon enough to meet the financial targets put forth by Magna; their whole plan revolves around Russia not Western Europe. Furthermore, for Opel to even have a chance at being successful in Russia they need to produce there; this fact alone makes any promises to keep Western Europe factories, especially German, open with minimal job cuts nonsensical.

The Western European auto sector has excess capacity with a stagnate/declining market that is currently being sustained by Government subsidies. In order to survive long-term Opel needs to lose at least three factories and employment levels to be reduced by ~15,000 not the 10,500 job cuts they planned and that is/was being whittled down to ~5-7,000.

Opel only makes sense going forward if it’s taken a bit upmarket, which they’ve been trying to do, and combined with Chevrolet in Europe – somewhat similar to Buick and Chevrolet NA. This is what Magna and the Russians wanted at first but GM rightly refused – nothing else makes sense in the long-run. There has got to be something going on behind the scenes here; the whole deal, as being presented publicly, doesn’t make sense for anyone. Well, maybe the Russians but it would take them 10 years to employ the current Opel/GM IP correctly – ten years they don’t have!

The Unions may scream bloody murder all they like, to be expected, but it doesn’t change the fact that Magna’s plan does not guarantee Opel’s Future and places the entire financial risk on Berlin. The unions are kidding themselves if they think Magna/Gaz's plans would save Opel and German jobs in the long-run. Magna/Sberbank at first wanted the rights to Chevrolet and the St Petersburg plant, one of GM's newest and most modern facilities in all of Europe, in order for the deal to make sense – they didn’t get it – GM had transferred the ownership rights of the plant and Chevrolet in Europe to GMDAT under the control of Holden which are both legally independent subsidiaries.

I can see GM, Magna and Gaz entering into an arrangement that all three parties tried to do a few years back until Gaz had to pull out do to financial reasons.

Again, at the risk of being repetitious, odds are that there is something more going on here then what is being put out publicly.

[rueben44]

Yes sir you have to know it we are getting 1/4 of the real story and what it really is we may never know. We may eventually get 75% percent of it but no more. I can not wait to see how this all comes out because somebody is playing hard ball.

[doh]

They warned them that they would. This thing is going to get ugly.

[Tstag]

Vauxhall workers are celebrating in the UK and backing GM. The UK Government also look set to provide some financial support. Let's hope after the dust has settled GM remember's who it's mates are when it comes to choosing where to make cars!

[Jedi]

If they dont wanna work, find someone that will!

[Hitman1970]

Fine. Shutter Opel then. One less competitor for Chevrolet in Europe.

[Quest]

Opel already repaid part of state loan -trustee
Wed Nov 4, 2009 6:22am EST

By Rene Wagner

BERLIN, Nov 4 (Reuters) - Carmaker Opel only owes German state and federal governments about 900 million euros because it has already paid back some of the bridging loan it received, a member of the trust overseeing Opel told Reuters on Wednesday.

Dirk Pfeil said that Opel had borrowed a total of 1.1 billion euros from the state and federal governments -- less than the maximum 1.5 billion euros they had made available. Pfeil said that 200 million euros had already been repaid.

#

Juergen Reinholz, economy minister of Thuringia, one of the states in Germany that hosts Opel plants, said GM had signalled it would pay back a 1.5billion-euro German bridging loan for Opel by the end of November.

Pfeil welcomed the decision by GM to keep Opel.

"I consider it to be the right move," he said. "The chances to preserve as many jobs as possible are just as high as they would have been with Magna."

He added: "Magna would have been completely overwhelmed. Magna would have had enormous difficulties getting Opel back on the right track."

http://www.reuters.com/article/mnaNe...59006620091104

File this under: Glimmers of the truth start to emerge. It’ll be interesting to say the least to see how this is going to ultimately turn out.

[Bravada]

Originally Posted by Hessen Ministerpraesident

You dirty *******s!

Originally Posted by Thuringen Ministerpraesident

OK with me!

Ruesselsheim, with Opel's HQ and the oldest plant is in Hessen. The Eisenach plant, one of the more modern, low-cost and effective (builds the relatively defect-free Corsa) is in Thuringen. Go figure

[nsap]

The union is upset because now they know that they are going to have to take the concessions needed to sustain Opel profitability going forward or face the closing of as many Germany facilities as possible. The concessions under the Magna deal were not enough (exactly why the German government liked Magna), GM would have been propping up Opel every few months for years under the Magna deal, which is ultimately why the Board said "no thanks" to the deal. It would have been Delphi all over again.

[Simon says]

Originally Posted by German Economy Minister Rainer Bruederle

"We will get back taxpayers' money,"

What a novel concept.

[doh]

Originally Posted by nsap

The union is upset because now they know that they are going to have to take the concessions needed to sustain Opel profitability going forward or face the closing of as many Germany facilities as possible. The concessions under the Magna deal were not enough (exactly why the German government liked Magna), GM would have been propping up Opel every few months for years under the Magna deal, which is ultimately why the Board said "no thanks" to the deal. It would have been Delphi all over again.

Magna was talking upto 10,000 lay offs. They were not upset with that.

[nsap]

Originally Posted by doh

Magna was talking upto 10,000 lay offs. They were not upset with that.

From what I have been told, that was far from enough. GM wants to shed plants, union workers and white collar workers. GM management and the Board had a non-stop 8 hour meeting yesterday about Opel and came to the conclusion that the Magna plan was not going to make Opel viable because the cuts were not significant enough considering that Opel (as of a couple months ago) is bleeding millions per day.

Expect to see a restructuring of Opel very similar to what we have seen in North America.