Germany government slams GM's Opel decision as "unacceptable"

Nov 4, 2009, 8:56 GMT

Berlin - The German government slammed as 'unacceptable' Wednesday the surprise decision by US carmaker General Motors (GM) to back out of a deal to sell European subsidiary Opel, as workers at the firm's German plants called for immediate strikes.

GM's decision, coming after months of tortuous negotiations and a seemingly done deal, came as German Chancellor Angela Merkel was actually in Washington to address Congress on the 20th anniversary of the fall of the Berlin Wall.

In Berlin, Economics Minister Rainer Bruederle called GM's behaviour 'entirely unacceptable.'

The cabinet of Germany's new coalition government of conservative Christian Democrats and liberal Free Democrats was due to meet later to discuss Detroit's surprise move.

The deal to 'save' Opel by selling it to Canadian-Austrian firm Magna was a key issue ahead of Germany's September general election.

The GM board voted Tuesday against the planned sale of a majority stake to Magna, ending months of uncertainty and placing pressure on the German government which had backed the deal with hefty state guarantees.

Bruederle demanded that GM repay a 1.5 billion euro (2.2 billion dollar) bridging loan, pledged by Chancellor Angela Merkel's government to keep Opel's operations going ahead of a Magna takeover.

German Opel employees at the Ruesselsheim plant called for strikes to take place Thursday.

'The activities will start in Germany and spread to all of Europe,' the head of the works council Klaus Franz told German Press Agency dpa.

The works council also withdrew an offer to forfeit salary and holiday pay to help Opel restructure, under a deal reached with Magna the previous day.

'General Motors' next step will be to blackmail governments and employees in Europe to finance the known, unsustainable GM concept,' said an embittered Franz.

In Britain meanwhile, GM's decision was welcomed by trade unionists, who had feared that a German-backed Magna deal could lead to the closure of factories belonging to Opel's UK brand, Vauxhall.

'This is the best decision for Great Britain and our factories,' said Tony Woodley, head of the trade union Unite. Vauxhall's factories in Ellesmere Port and Luton employ 5,500 people.

GM's European subsidiary also has factories in Spain, Poland, Belgium and Austria. About half of Opel's 50,000 workers are employed in Germany.