General Motors Company appears close to sealing the deal to sell its Opel division to Canadian-based auto parts maker, Magna International, Incorporated. German news agencies are reporting that the deal could be finalized by Thursday, October 15.
On September 10, General Motors agreed to sell 55% of its Opel operation to Magna International and its Russian partner Sberbank; however, the deal stalled over concerns about possible plant closings.
The prospective buyers have committed to keeping Opel’s German-based facilities open but have offered no such guarantee regarding plants in Antwerp, Belgium and Luxton and Ellesmere Port, England where the Opel’s Vauxhall brand is produced.
On Monday, a spokeswoman for Britain’s Department of Business, Innovation and Skills said, “Some progress is being made in talks between key parties, but there are still issues to be resolved.” She also said, “We, like everybody else, would like a speedy resolution, but we want to get the terms right.”
Vauxhall currently employs some 5,500 workers.
Labor unions have demanded that plants in Spain and the U.K. be kept open and expressed concern that the 4.5 billion euro aid package promised by Chancellor Angela Merkel’s administration would result in special consideration being given to plants located within Germany.
Under the proposed deal, General Motors would retain a 35% stake and Opel’s employees would be granted a 10% stake in return for concessions of 1.2 billion euros.
Opel has announced that it will cut some 20% of its current workforce. The company currently employs approximately 50,000 workers in Germany, Belgium, the U.K. and Spain. Approximately half of those workers are employed at production plants located in Germany.
Magna International’s partner in the purchase deal is Russia’s largest commercial bank, Sberbank. Together, Magna and Sberbank plan to inject some 500 million euros into the struggling automaker and have indicated that the majority of that money would be used to increase Opel’s market share in Russia.
Speaking during a visit to GM’s operations in Shanghai, CEO Fritz Henderson speculated that the Opel sale could be finalized this week. Klaus Franz, Opel’s labor leader, said on Monday that he expects the sale to be completed this week as well. Franz said, “We are in the home stretch but there a few more points to clear up.”