Report: GM preparing to sign a contract on selling Opel

Article by Christian Andrei, on August 27, 2010

The contract signing between General Motors Co. and Magna International and Sberbank will take place next week, according to sources. The deal is meant for GM to sell a majority stake in its European arm Opel to Magna and Sberbank.

The source also said that it would be "realistic" to expect the deal to be signed by the middle of next week. This report is actually consistent with announcements made by

GM and Magna officials previously that they aim to get the contract signed by early October and for the sale to formally close by the end of November. Meanwhile, discussions participated in by the companies and Opel union leaders are ongoing.

So far, the talks have focused on the overall amount of cost concessions labor will provide instead of how to allocate the expected 10,500 job cuts the new owners plan.

Opel's 50,000 workers, about 50% of which are in Germany, have pledged to cut costs by 265 million euros ($388.6 million) per year and are expected to get a 10% stake in Opel in return.

On October, countries with Opel plants are scheduled to meet to discuss the possibility that the deal would lead to jobs being protected in Germany while workers in other European countries would lose their jobs, says Autonews.

Last Tuesday, the European Union's antitrust chief urged EU countries with Opel plants to present details of their proposed state aid for the carmaker as soon as possible.

Berlin has promised 4.5 billion euros in aid to Opel in order to protect as many jobs in Germany as possible, understandably drawing a lot of flak from EU countries. Britain and Spain have written letters to the EU executive questioning the German aid.

Topics: gm, opel

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