GM and Opel looking for a third-party partnership
By Andrew C., 26 Aug, 2010. 0 Comments
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The restructuring plan presented to the US government recently by GM shows a truly global character as the company is deliberating a workforce cut and selling a portion of its stake holdings in its well-known European division Opel. The firm is considering as part of their restructuring strategy the possibility of third-party partnerships, alliances and equity stakes whichever will be most beneficial for GM Europe and Opel's survival.
The state of Thuringia in Germany, where an Opel plant operates, is offering to take part in the buy off of Opel's stakes but they require a clear plan for Opel's future before they can be specific about their assistance. There were talks between Thuringia and GM Europe of a guarantee amounting to 20 million Euros to 40 million Euros. The plan of GM is to reduce costs in its European arm by $1.2 billion, a plan that has resulted in an outrage in Europe as they foresee job cuts and factory close downs resulting from such a move.
GM is presently having discussions with labor reps trying to forge a plan that will exclude job cuts and factory close downs as much as possible. However, plunging demands for cars in Europe may force GM to go ahead with the plan. Forecasts say that GM Europe will regain a status of profitability in 2011. It was recently announced by GM that it will be cutting 26,000 jobs outside the US in proportion to the regional market performance. Opel workers were outraged that their jobs were also put in the line. They said that Opel performed profitably well last year as well as this year.
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