GM takes risky U-turn, keeps Opel
TEXT OF STORY
Bill Radke: It is quite a turnaround for the resurrected General Motors. GM has decided not to sell its European unit, Opel. It’s a risky decision and it’s likely to rile the government of Germany, where Opel — and tens of thousands of its workers — are based. Marketplace’s Mitchell Hartman has the story.
Mitchell Hartman: Germany’s government favored a sale of Opel to an investor group made up of Canadian auto-parts maker Magna, and a Russian bank. The hope was, that would save German jobs. But the sale ran into antitrust concerns in Europe. GM, meanwhile, had concerns of its own. It worried its designs and technology would get into the hands of competing automakers, especially in Russia.
Rebecca Lindland tracks the auto industry at IHS Global Insight.
REBECCA LINDLAND: There’s a lot of strategic benefits to having such a strong 100-percent, wholly-owned presence in Europe. I think behind the scenes they’ve been desperately trying to figure out a way to make this work.
With the decision to hold on to Opel, GM will now have to pump a few billion dollars in to get the company profitable again. And it faces a backlash from the German government as it downsizes the workforce there. Germany has asked the automaker to repay money it got to help it through the financial crisis.
I’m Mitchell Hartman for Marketplace.
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