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| Economy |
| GM opts to keep European subsidiary Opel |
| 2009-11-05 |
| [Iran Press TV Latest] The giant US car maker General Motors (GM) has decided to keep its European subsidiary, Opel, in what analysts describe as a sign of the company's renewed confidence. "Keeping Opel was the right thing for GM's global enterprise to do," said auto analyst Aaron Bragman at the consultancy IHS Global Insight, reported AFP. "Opel is a critical piece of GM's global empire, providing, as it has the platforms, for a number of the company's global vehicles. Losing Opel, and a significant chunk of the European market, was a desperation strategy that GM apparently feels it is secure enough now not to need." The executive board of the Detroit-based company voted on Tuesday to keep Opel rather than sell a majority stake to Magna and its Russian partner OAO Sberbank, reversing a September decision. GM's decision caused various backlashes among business leaders and politicians. Klaus Franz, Opel's top labor leader, called it a "black day" and Roland Koch, the prime minister in Opel's home state of Hesse, said he was "angry" and concerned about protecting jobs, according to the Bloomberg. The automaker's decision to keep Opel has also caused concern among German workers, as GM would need to slash the number of workers to save the Adam Opel GmbH division from bankruptcy. The company would also need to convince unions to agree to 265 million euros ($390 million) in concessions, accepted under the failed Magna deal, and to repay a 1.5 billion-euro loan from Germany. |
| Posted by:Fred |