The General Motors board of directors is supporting a bid from a consortium of Magna International and Sberbank to buy a majority stake in its European Opel and Vauxhall operations.
Several key issues will be ironed out over the next few weeks to secure the binding agreements, including written support from labour unions and the finalisation of a financing package from the German government.
The definitive agreements should be ready to sign within a few weeks, with closing to follow in the next few months. Under the deal, Magna/Sberbank will purchase a 55 per cent stake in New Opel, GM will hold a 35 per cent stake and employees will be provided with a 10 per cent stake.
‘The hard work over the past two weeks to resolve details in the German financial package brought GM and its board of directors to recommend Magna/Sberbank,’ said Fritz Henderson, president and chief executive of GM.
Upon hearing the news, Unite’s joint general secretary, Tony Woodley, said: ‘The uncertainty surrounding the ownership of Vauxhall is now over, but the uncertainty surrounding the long-term future of Britain’s plants will continue. One of the alternatives could have been the unthinkable position of liquidation. Nevertheless, with Magna as the new owner, we need to make sure that British plants and people are not treated disproportionately during the restructuring that will take place.’
For his part, UK business minister Pat McFadden said that the UK government would continue its discussions with Magna. ‘They have told us of their commitment to continuing production at both Ellesmere Port and Luton and we will work to make sure we get the best possible outcome for the UK,’ he added.
On the positive side, the agreement will keep Opel and Vauxhall a fully integrated part of GM’s development organisation, allowing all parties to benefit from the exchange of technology and engineering resources.
Participating in GM’s global technology development and purchasing organisations secures important economies of scale for Opel, Vauxhall and other GM brands.