has terminated the sale process for its Opel unit, ending months of talks between the automaker and
GM said it will retain Opel and will initiate a restructuring of its European operations as the business environment has improved over the past few months. In addition, GM noted the importance of Opel in the automaker's global strategy.
Magna's winning bid was selected over one from Brussels-based
, favored because of state aid pledged by Germany. Magna's plan to buy Opel had been supported by loan guarantees totaling 4.5 billion euros.
GM said that on a preliminary basis, the its restructuring plan entails total expenses of about 3 billion euros, significantly lower than all bids submitted as part of the investor solicitation. GM said it will work with all European labor unions to develop a plan for meaningful contributions to Opel's restructuring.
"GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration," said Fritz Henderson, president and CEO, in a statement. "This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall's long-term future."
Magna's Co-Chief Executive Officer Siegfried Wolf said the company understands GM's decision to retain Opel was in the automaker's best interests.
"We will continue to support Opel and GM in the challenges ahead," Wolf said in a statement.
The Wall Street Journal
noted that one issue that GM faces soon is the Nov. 30 expiration on 1.5 billion euros in bridge loans from Germany.
, its first year-over-year sales gain since January 2008.
-- Written by Robert Holmes in New York
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