Opel-Magna deal to get done this week, labour boss expects

ERJ staff report (AN)

HAMBURG, Germany (Reuters) -- General Motors Co. is on track to sign a contract this week to sell a majority stake in Opel to a Canadian-Russian consortium, Opel union boss Klaus Franz said.

Opel workers have to agree cost concessions for the sale of a 55 percent stake to Canadian supplier Magna International Inc. and its Russian partner, state-controlled lender Sberbank, to proceed.

"We are on the home stretch but there a few more points to clear up," Franz said on Monday, adding that talks about the future of Opel's British sister brand, Vauxhall, had made good progress. "I expect the contract to be signed in the course of this week."

The negotiating parties have said they aim to close the deal by the end of November.

Labour has said that the 50,000 Opel staff -- half of them in Germany -- could contribute annual savings of 265 million euros ($390 million) in return for a 10 percent stake in Opel.

Other European countries with Opel plants including Britain, Spain and Belgium have expressed concern about the deal, which envisions cutting about 10,500 jobs and seeks 4.5 billion euros in state aid, most of it coming from Germany.

A German government committee has approved the 4.5 billion-euro state loan guarantee to back the deal, German magazine Der Spiegel reported.

Magna and Sberbank have vowed to inject 500 million euros into Opel, which they want to use to make an aggressive push into the Russian market.

They have committed to keeping German plants running. Opel's factory in Antwerp, Belgium, and Vauxhall's two U.K. plants are seen to be most at risk.

From Automotive News (A Crain publication)