GM's 'Coin Toss' to Keep Opel

DETROIT (TheStreet) -- The new board of General Motors looked at the deal to sell Opel three times, and each time, "it was a coin toss," a top GM executive said Wednesday.

The new board, which took office Aug. 1, was facing "the single biggest decision they were to make," John Smith, group vice president for corporate planning and alliances, said Wednesday on a conference call with reporters. The board fretted about selling Opel, a big player in the key European market and a source of small, fuel-efficient cars and engines.

GM said Tuesday that it would retain Opel and begin a $4.5 billion restructuring of its European operations. That reversed its spring decision to sell 55% of Opel to Canadian auto supplier Magma and Russian lender Sberbank. The deal had the support of the German government, which provided about $2.2 billion in bridge financing, and of European labor unions. GM was to retain 35% of Opel, with employees holding 10%.

But the board came "to understand (the role) that Opel plays in global product development (and) they've seen since August an Opel that's running at or slightly better than the plan we laid out in 2009," Smith said. "Opel is important to GM and GM is important to Opel, and we have the means and capability to restructure it on our own."

A big question was the complexity created by multiple owners. "It was going to be a very complicated deal to manage," Smith said. "If you think a business arrangement is going to be complicated, it suggests that decisions are going to take more time to reach."