General Motors (GM) has cancelled plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall.The US giant said in a statement that its board had made the decision because of "an improving business environment for GM over the past few months". GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna. The Magna deal had the backing of the German government, which had pledged 4.5bn euros ($6.7bn; £4bn) of loans. GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy
General Motors (GM) has cancelled plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall.
The US giant said in a statement that its board had made the decision because of "an improving business environment for GM over the past few months".
GM had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna.
The Magna deal had the backing of the German government, which had pledged 4.5bn euros ($6.7bn; £4bn) of loans.
GM added that it had also come to its decision because of the importance of Opel and Vauxhall to its global strategy
General Motors, a dinosaur only a year ago, has emerged Phoenix-like from the ashes of bankruptcy. This week it surprised everyone by saying it will not after all sell Opel and Vauxhall, its main European operations. German politicians and union leaders, who thought they had won the tug-of-war over the sale to Canadian car parts maker Magna and Russian Sberbank, are shocked and dismayed. They should not be: although many obstacles remain, GM's decision is good for Europe's car industry. The imperative efficiently to dismantle Europe's overcapacity in car manufacturing is one that Germany has long been doing all it can to frustrate. Its government - with union leaders' support - was willing to help Magna and Sberbank's purchase to the tune of €4.5bn in loan guarantees for projected restructuring costs. This stitch-up defied commercial logic: the Belgian investment group RHJ, which GM at one point preferred, offered to make do with €3.2bn. But Magna seemed more pliant to German wishes that job cuts disproportionately happen elsewhere in Europe. This costly employment protection flagrantly breached the spirit of the European single market.
The imperative efficiently to dismantle Europe's overcapacity in car manufacturing is one that Germany has long been doing all it can to frustrate. Its government - with union leaders' support - was willing to help Magna and Sberbank's purchase to the tune of €4.5bn in loan guarantees for projected restructuring costs.
This stitch-up defied commercial logic: the Belgian investment group RHJ, which GM at one point preferred, offered to make do with €3.2bn. But Magna seemed more pliant to German wishes that job cuts disproportionately happen elsewhere in Europe. This costly employment protection flagrantly breached the spirit of the European single market.
And I think that protecting car manufacturers was a waste of stimulus money on the longer term...
Still, I wonder whether Merkel was briefed, because if she wasn't, it's a big "fuck you" from the US government.
