In a surprising turn of events, the General Motors' Board of Directors has decided to retain Opel instead of selling it off to Magna International. Fueling this decision is the improving business environment the past few months as well as the importance of Opel//Vauxhall to GM's global strategy. GM plans to initiate a restructuring of its European operations and will soon present its restructuring plan to Germany and other governments.
Fritz Henderson, president and CEO, said that he hopes that the plan receives favorable consideration.
He explained that although the company understands that the complexity and length of this issue have been draining for all involved, GM's goal from the outset has been to secure the best long-term solution for its customers, employee, suppliers, and dealers.
Henderson said that this was determined to be the "most stable and least costly approach for securing Opel/Vauxhall's long-term future."
On a preliminary basis, the GM plan entails total restructuring expenses of about 3 billion, which is significantly lower than all bids submitted as part of the investor solicitation.
GM said that it will work with all European labor unions to create a plan for contributions to Opel's restructuring. Analysts say that while Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence.
"While strained, the business environment in Europe has improved." Henderson said. "At the same time, GM's overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured.
We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We're also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement."