GM8217;s Opel move raises anger,new uncertainty

Now German workers worry GM will make even more cuts to return Opel to profit than Magna would have. Still,the decision won a cautious welcome from union officials in Britain and Poland,where workers had feared possible cutbacks in a Magna takeover.

John Smith,GM8217;s chief negotiator for the sale of Opel,said in a conference call Wednesday that GM8217;s plan was similar but not identical to that presented by Magna and Sberbank,which had called for the elimination of 10,500 European jobs or about 20 percent of the work force. Smith did not elaborate on possible job losses.

8220;We feel that 8230; once people have a chance to look at it closely,if they liked the Magna plan,they will also like8221; GM8217;s plan,he said. 8220;We8217;re going to let the plan speak for itself.8221;

8220;We8217;ll very soon present to the European governments8221; the plan,Smith said. He added that GM hopes 8220;to arrive by the first quarter at a restructuring plan with the governments and the unions.8221;

GM8217;s decision handed Merkel8217;s new center-right coalition government an unwelcome test just a week after taking office. German officials swiftly demanded a restructuring plan from Detroit and vowed to recover by November 30 a euro1.5 billion 2.2 billion bridge loan granted to keep Opel afloat as a buyer was sought.

8220;We will get the taxpayers8217; money back,8221; new Economy Minister Rainer Bruederle told reporters. 8220;Dealing with employees in this way eight weeks before Christmas is in no way acceptable,8221; he added.

GM8217;s Smith said the US automaker would repay the loan 8220;if we8217;re requested to do so8221; by Germany.

8220;We8217;ve already begun to repay some of the bridge loan,8221; Smith told reporters on the conference call. 8220;All that is outstanding is roughly euro900 million.8221;

Merkel,who was flying home from a speech to the U.S. Congress when GM announced its decision,made no public comment Wednesday,but officials made clear their annoyance.

Spokesman Ulrich Wilhelm criticized GM8217;s 8220;surprising 180-degree turn8221; and said Merkel may soon speak with President Barack Obama about the issue. GM is majority owned by the US government,which said it wasn8217;t involved in the decision to keep Opel.

On Wednesday,Merkel spoke with Opel8217;s chief employee representative,Klaus Franz,who said it was 8220;a black day for Opel.8221;

There was a furious reaction from the governor of Germany8217;s most populous state,North Rhine-Westphalia 8211; which is home to Opel8217;s Bochum plant and holds elections next May that will offer a crucial test for Merkel8217;s new governing coalition.

8220;After many promises and months of negotiations 8230; GM has left workers out in the cold,8221; said Juergen Ruettgers,a deputy leader of Merkel8217;s party. 8220;This attitude from General Motors shows the ugly face of turbo capitalism. It is completely unacceptable.8221;

Russia,which had backed the Magna-Sberbank plan,also was caught by surprise.

8220;The decision by GM to turn down the deal was astonishing,8221; state news agencies quoted Prime Minister Vladimir Putin8217;s spokesman,Dmitry Peskov,as saying.

Germany had promised euro4.5 billion in further financing to support plans for Magna and Sberbank to take a 55 percent stake in Opel a pledge that drew concerns from the European Union8217;s competition commissioner.

With those plans off the table,Germany appeared unenthusiastic about pledging any new support 8211; though it wasn8217;t ruling it out.

8220;General Motors has the right to make an application,we have the duty to examine this application,and the outcome of this is open,8221; Bruederle said.

GM,which said the European business environment and GM8217;s health have both improved since the company put up Opel for sale,put the cost of restructuring at euro3 billion.

Unions and employees had offered cost-cutting concessions to ease a Magna deal,such as forgoing pay increases,that are now off the table. GM will face a new battle to secure concessions for its own plan 8211; and raised the prospect of a bankruptcy if it is blocked.

8220;It is in the interest of the unions to negotiate a deal with GM,8221; GM Europe spokeswoman Karin Kirchner said. Failure to restructure 8220;would result in the operation becoming insolvent,an unnecessary and undesirable outcome for all involved.8221;

However,German labor representatives were defiant.

8220;We won8217;t help shape the way back to General Motors,8221; Franz said. 8220;Instead,we8217;ll take up our classic function of defending the workers.8221;

Franz said workers would start brief work stoppages Thursday. Rudi Kennes,another employee representative,said workers at the Antwerp plant in Belgium,whose future is uncertain,would walk off shifts on Friday and Sunday to warn GM against job cuts.

In Spain,Industry Minister Miguel Sebastian said Madrid would not make concessions to GM beyond a deal it had with Magna to accept 900 job cuts at Opel8217;s Zaragoza plant.

8220;We are not willing to budge even an inch,8221; he said.

The mood was different in Poland and Britain,where workers had feared pressure to save jobs in Germany would leave them bearing the brunt of cutbacks.

Magna had said it planned to cut about 10,500 of the 50,000 jobs at Opel and sister brand Vauxhall in Europe,with less than half the job cuts,or around 4,500,in Germany 8211; home to around half the work force. It also said it would keep all four German plants open.

8220;The future is still uncertain,but our fear is smaller,8221; said Miroslaw Rzezniczek,a Solidarity union official at the Gliwice plant in Poland. 8220;Magna 8230; did not want to guarantee that our plant will not be closed.8221;

Despite the lack of details,8221;I am pleased we will be dealing with GM because we know them and we understand their culture and they know us,8221; said John Featherstone,a Unite union official at Vauxhall8217;s Ellesmere Port,England plant.

There was plenty of resignation,but little optimism,at the Ruesselsheim plant in Germany,where Adam Opel GmbH has its headquarters.

8220;They led us all around by our noses,8221; worker Michael Kleinmann said. 8220;They8217;re not interested in the fate of individuals.8221;

Co-worker Ali Yildiz said: 8220;Now everything8217;s possible again,just like a year ago.8221;