As General Motors’ new board of directors became more immersed in the automaker’s business, it began to question more and more the idea of selling off a majority stake in the company’s Opel division, a top executive indicated Wednesday.
“It was always a big question mark that we could succeed globally and sell off two-thirds of our Opel operations,” John Smith, GM group vice president of corporate planning and alliances, said Wednesday.
The board’s surprise reversal Tuesday to keep Opel and not sell it to Magna and its Russian bank partner Sberbank was still reverberating through Germany, where politicians and union leaders blasted the decision.
“After many promises and months of negotiations … GM has left workers out in the cold,” said Juergen Ruettgers, a deputy leader of German Chancellor Angela Merkel’s party. “This attitude from General Motors shows the ugly face of turbo capitalism. It is completely unacceptable.”
GM, buoyed by improvements within the economy and its own business, is now moving quickly to finalize a restructuring plan for Opel, which, Smith said, will require less government aid and should look similar to what has already been proposed.
GM hopes by the end of the first quarter of 2010 “to have arrived” at a restructuring plan that is acceptable to involved European governments and labor unions, he added.
If requested to do so, the Detroit automaker is prepared to pay off the original German bridge loans, of which 900 million euros ($1.34 billion) remain, which were given earlier this year to help Opel stay afloat while GM negotiated a deal to sell off the division, Smith said.
“We will get the taxpayers’ money back,” Germany’s new Economy Minister Rainer Bruederle told reporters.
Magna-Sberbank spent several months in difficult negotiations with GM to finalize an agreement to acquire 55% of Opel and Vauxhall. A deal was announced in September. Last month, the European Union began questioning the arrangement, including the German government’s promise to contribute 4.5 billion euros ($6.68 billion) in loan guarantees.
Meanwhile, GM emerged from bankruptcy in the United States in July as a new company. GM’s new board met for the first time in August, and it was clear that members questioned the sale.
“They’ve come to understand the role that Opel plays in our global product development activities, our global powertrain activities and our technology strategies globally,” Smith said.
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