FRANKFURT (Reuters) — General Motors Co. put on hold a deal to sell a 55 percent stake in carmaker Opel to a Russian-backed consortium led by Canadian auto parts group Magna International Inc., GM’s chief negotiator on the deal said today.
No sale can proceed until the U.S. carmaker’s board of directors discusses the Opel deal at a meeting on Nov. 3, chief negotiator John Smith said in a blog entry, pouring cold water on hopes that the sale contract could be signed this week.
"Given the significance of the Opel transaction, GM’s board will soon meet in its regularly monthly meeting to consider Minister zu Guttenberg’s letter and changes to the Magna/Sberbank proposal that have occurred since its last review on September 9," Smith said in the blog.
He was referring to German Economy Minister Karl-Theodor zu Guttenberg’s request to GM — prompted by European Union concerns about promises of German state aid — to confirm that the carmaker chose Magna for business and not political reasons.
In the meantime, the company would work to resolve remaining open points with the Magna/Sberbank proposal, including labor cost reductions and a plan to obtain 4.5 billion euros ($6.8 billion) in aid sought from states with Opel plants, Smith said.
Reduced number of job cuts
Opel’s workers — who face about 10,000 job cuts under the new owners from 50,000 now — are supposed to get a 10 percent stake in the new company in return for labor cost concessions, while GM will keep a 35 percent stake.
GM decided last month to sell a majority stake to Magna and its Russian partner Sberbank.
Opel’s buyers originally intended to eliminate about 10,500 jobs in Europe, including about 4,000 in Germany, but talks with labor have resulted in promises to cut fewer jobs.
Workers in Spain are due to vote on a preliminary deal that would keep a plant there open at the cost of 900 jobs — instead of up to 1,650.
U.K.-based union Unite has already reached an agreement with Magna that would preserve two Vauxhall production plants and rescue 600 of the jobs that were slated to go. Vauxhall employs about 5,500 people.
Magna and the Russian bank have vowed to inject 500 million euros into Opel, aiming to use it to make an aggressive push into the Russian market.
The European Commission is keeping a close eye on the transaction to ensure state aid is not misused for political purposes.
It has pressured Berlin into making assurances that the state aid it envisages was available to any buyer, not just its preferred buyer, Magna. The supplier has proposed keeping all four Opel plants in Germany open.