Europe - automotive shock
Anger as General Motors plans to axe 10,000 Opel jobs
Article published on the 2009-11-05 Latest update 2009-11-05 11:44 TU
Opel workers in Ruesselsheim, Germany arrive at the plant 5 November
(Photo: Reuters)
GM is looking to slash costs by 30 percent at Opel, a European unit that employs 55,000 people. It decided against the sale to Canadian auto parts manufacturer Magna International and Russian bank Sberbank in favour of its own restructuring at Opel.
Huge crowds are expected to march Thursday across Germany, where half of Opel's workforce is employed and where the government had backed the Magna-Sberbank deal.
Germany had agreed bridging loans with General Motors worth 1.5 billion euros to keep Opel in business, for which the government is now seeking a reimbursement.
A spokesman for German Chancellor Angela Merkel's said she would likely be in contact with US President Barack Obama "in the coming days" and would make it clear that Berlin wanted the money returned. The loan expires at the end of November.
GM vice president John Smith said that after a partial repayment, the company now owes Germany 900 million euros. "We can and will pay back the bridge loan," he said.
Analysts say the U-turn on the sale of its European division reflects renewed confidence in the US auto giant's global strategy and the need for small-car technology.
