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No need to revisit Opel decision: Germany
2009-10-19
BERLIN (AFP) - Germany said on Monday that there was no need for General Motors to revisit its decision to sell a majority stake in its European unit Opel/Vauxhall after the EU raised concerns about state aid. "There is no need to question decisions that have already been taken, and in particular, in the view of the government, a repeat of the decision-making process is not needed at all," government spokesman Ulrich Wilhelm told reporters. An earlier report in the Wall Street Journal cited unnamed sources as saying that GM was working on a "plan B" if European Union regulators scupper the sale to Canadian auto parts maker Magna and Russian state-owned lender Sberbank. GM on September 10 announced a preliminary plan to sell a 55-percent stake in Opel, with GM retaining 35 percent and employees 10 percent, a deal backed by 4.5 billion euros (6.7 billion dollars) in state aid promised by Germany. But EU Competition Commissioner Neelie Kroes last week questioned Germany's aid, saying there were "significant indications" that it was contingent on Magna winning the bidding for Opel. Making state aid contingent on one particular buyer gaining control of Opel would violate EU competition rules. Economy ministry spokesman Felix Probst told the same regular briefing on Monday that Berlin had on Saturday sent a letter to GM and the Opel Trust, a German body responsible for Opel since June, setting out Kroes's concerns. "We are waiting for a response and we will then send it onto the Commission immediately," Probst said. "We do not expect that there will be any fundamental problems because the bidding process was based exclusively on economic factors." A final deal was meant to be inked last week but has been postponed. The car maker employs some 25,000 people in Germany, about half of its total European workforce along with sister brand Vauxhall in Britain. Magna is reportedly planning to cut 10,500 jobs across Europe, including around 4,000 in Germany. Germany wants other European countries where Opel has factories including Britain, Spain, Poland and Belgium to provide some its promised 4.5 billion euros in aid. But these countries have been reluctant to make firm commitments amid concerns that the money would help ensure German jobs at the expense of employees in their countries.
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