Ecombd

Thursday, November 12, 2009

German Government Unhappy with the Cancellation of GM’s Opel Deal

It is quite natural that German government would not be happy with General Motors’ failure to sell its Opel division to Canadian automaker Magna as well as Sperbank, an investment bank in Russia. Recently, General Motors (GM) has announced the cancellation of a proposed deal with Magna over the acquisition of Opel. However, having seen excellent sales over the last two months indicating a steady recovery from Economic recession, GM decided not to sell its Opel.


Opel is a Germany based automaker, in fact, the second largest automaker in the country. However, GM was facing a tough condition during the recession period and at one stage it seemed that the American automaker would have to close down its four Opel plants in Germany and lay-off several thousands of workers. However, German government, who provided .5 billion Euros to Opel as loan, was optimistic about Opel’s future when Magna assured that it would not close down the Opel plants in Germany and lay-off maximum 2,600 out of 25,000 workers.


GM has now said that it would restructure Opel and apologized for their decision of not selling Opel. German Chancellor Angela Merkel also condemned GM and now wants a solution to the problem.


Related article:

rediff

0 comments: