General Motors said overnight its board decided to keep Opel, scrapping an on-again, off-again plan to sell its big European division.
GM said in a statement the board made the decision because of "an improving business environment for GM over the past few months, and the importance of Opel/Vauxhall to GM's global strategy".
It said the GM board "has decided to retain Opel and will initiate a restructuring of its European operations in earnest" and seek aid from the German government."GM will soon present its restructuring plan to Germany and other governments and hopes for its favourable consideration," said Fritz Henderson, president and chief executive.
"We understand the complexity and length of this issue has been draining for all involved.However, from the outset, our goal has been to secure the best long term solution for our customers, employees, suppliers and dealers, which is reflected in the decision reached today.
"This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future."Henderson said the restructuring costs have been estimated at three billion euros (4.4 billion euros) "significantly lower than all bids submitted as part of the investor solicitation."
"GM will work with all European labor unions to develop a plan for meaningful contributions to Opel's restructuring," he added."While Opel continues to outperform against its viability plan assumptions and immediate liquidity is stable, time is of the essence."
GM had announced plans to sell a 55 percent stake in German-based Opel to Canadian firm Magna and its Russian partner Sberbank.European Union regulators last month cast doubt on the deal, saying there were "significant indications" that German aid of 4.5 billion euros (6.6 billion dollars) for the deal had been proffered only if Magna and Sberbank won the bid, which had been bitterly contested.
The saga has dragged on since February, with the fate of at least 10,500 of GM Europe's workforce of around 50,000 hanging in the balance.That is the number of jobs Magna said it would cut, while GM is believed set to eliminate more in the restructuring of the ailing carmaker.
Workers in Belgium, Britain, Poland and Spain had slammed Magna's decision to maintain all German factories in operation, charging that more efficient plants would suffer because Berlin was providing state aid.Berlin had asked other European countries to contribute to the rescue package as well.
In October, a GM executive pushed back the signing date again and a press report said GM wanted to hang on to the company.
