Germans relieved by GM decision on Opel
The European subsidiary was sold to the group seen as likeliest to save jobs.
RÜSSELSHEIM, Germany - The furor over General Motors Corp. may have died down in the United States since the company emerged from bankruptcy in July. But here and all over Germany, GM - backed by $50 billion in U.S. taxpayer money - has persisted as a source of high drama.
This city of 60,000 near Frankfurt is home to Adam Opel GmbH, GM's biggest European subsidiary, which was saved from bankruptcy by a $2.2 billion loan from the German government in late May.
The country was on pins and needles over who would take over the automaker: a Canadian-Russian partnership backed by German politicians and labor leaders, or a Belgian holding company preferred by GM.
But it did not stop there. In recent weeks, speculation mounted that GM had decided against selling Opel because it was too worried about Russians gaining access to the fuel-efficient technologies its German engineers had developed here.
"Germans are angry and annoyed. One day it's this, one day it's that," Jakob Müller said Wednesday, standing outside Opel's downtown headquarters. Müller has no connection to Opel, but like most Germans is quick with a strong opinion on the subject.
The prospect of remaining in GM's control was nothing less than a frightful fairy tale to Klaus Franz, a labor leader who rounded up political support for the bid by Magna International Inc., a Canadian auto-industry supplier, and Russia's Sberbank.
Franz, chairman of GM's European Employee Forum, described the possibility of GM's changing its mind about the sale and maintaining control of Opel this way:
"The mother was going to let her daughter move out to find happiness with her new boyfriend. Then the mother takes the boyfriend away and turns into a very unpleasant stepmother."
Instead, on Thursday the board of GM emerged as the more benevolent mother: It decided after all in favor of Magna and Sberbank. The person to deliver the news was German Chancellor Angela Merkel, who said she was "extraordinarily happy" about the decision.
The current plan calls for GM to retain 35 percent of its European operations, which include the Vauxhall car company in Britain. Employees will get 10 percent, and the rest will be split between Magna and Sberbank, GM said.
The tug-of-war over Opel, top news in Germany all summer, was one of the more bizarre scenarios spawned by the global financial crisis: Faced with the collapse of a relatively small car company owned by General Motors since the beginning of the Great Depression, German politicians and labor leaders aligned with a Russian bank and a Canadian auto supplier to haggle with GM, now 61 percent owned by the U.S. government.
Those negotiations were a test of the Obama administration's pledge not to meddle in the management of GM. Top German government officials applied as much pressure as they could on their U.S. counterparts in Washington.
Whether that helped the Germans get their way is not clear. Though many Germans assumed President Obama was calling the shots, U.S. officials insisted over the last month that the decision was being made in Detroit, not the District of Columbia.
For German politicians fighting for attention in a big election year, pushing the sale of Opel to Magna and Sberbank, which pledged to keep German factories open, was a surefire way to keep voters happy.
For Opel workers in Germany, where half of GM's approximately 50,000 European employees are located, the sale offers the chance to get out from under the thumb of what they see as an overbearing parent.
"The Americans kept our hands tied," said Georg Kraus, 57, who has worked at Opel for 39 years and is about to retire. He and other workers said they were convinced Opel would have a bright future if it could get out from under GM.
"It is buzzing here," Kraus said, nodding toward the factory, where a promising new model, Insignia, is produced.
Workers at Opel, which started as a sewing-machine manufacturer in 1862 and switched to building cars in 1899, had been living with painful uncertainty since November. That's when Opel management asked German state and federal governments for loan guarantees to protect it from a GM bankruptcy.
That help, subject to a tough political battle, did not come until late May, just days before GM's bankruptcy filing June 1. In exchange for the $2.2 billion bridge loan, GM turned over 65 percent of Opel to a trust controlled by the company in conjunction with German federal and state governments.
Germany agreed to provide an additional $4.3 billion in financing only if GM sold the operations to Magna and Sberbank.
There were other potential buyers. Fiat Group S.p.A., the Italian automaker that was in the process of taking control of Chrysler L.L.C., threw its hat in the ring, but quickly dropped out. A Belgian holding company with U.S. ties, RHJ International, stayed at the table until the end, but it never was considered a viable option by the German government, which held the purse strings.
Franz, the Opel labor leader, warned of a tough fight ahead for the unions, but he said he was convinced that the deal with Magna was the only one that would give Opel a future.
"If General Motors has 35 percent of a profitable enterprise," he said, "that is much better than having 100 percent of an absolute disaster."