General Motors abandons advanced talks to sell Opel

| November 4, 2009 | 0 Comments

US car giant General Motors (GM) has abandoned plans to sell a majority stake in its European car business Opel, including its UK brand Vauxhall.

GM had agreed to sell Opel and Vauxhall to Magna, a Canadian car parts supplier, to raise funds after facing collapse earlier this year.

The shock decision comes after talks were at the advanced stage and the announcement is likely to cause many problems in Europe where the sale has been progressing for many months.

In a statement, GM said the decision comes after “an improving business environment for GM over the past few months”.

In March, GM announced plans to offload Vauxhall and sister company, Germany-based Opel, and finally agreed to sell to Magna in September. GM, like many other carmakers, has been struggling amid the global recession and announced heavy losses for the 2008 year.

Furthermore, the US car giant received around $50 billion in aid from the US Government to prevent it from collapse.

The deal with Magna meant that many thousands of jobs were safeguarded at Vauxhall’s two UK plants.

However, yesterday GM said its US sales had risen in September for the first time in nearly two years.

The announcement was welcomed by Tony Woodley, secretary general of the Unite Union who said he was “absolutely delighted” by the news and described it as an “incredible turnaround” by the US car giant.

Aaron Bragman of IHS Global Insight said that GM never really wanted to offload Opel but was forced into it as a result of its dire finances.

Opel has a European workforce of more than 50,000, with 25,000 based in Germany. In the UK, its Vauxhall brand employs more than 5,000 across two plants in Luton and Ellesmere Port.

Tags: General Motors, GM, Magna, Opel, , , Vauxhall

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 1415 times, 1 so far today