Strikes called over sell-off failure

Opel labor representatives called for work stoppages across Europe to protest General Motor Co's decision not to sell its European subsidiary.

Klaus Franz, chairman of Opel's works council, said workers would walk out starting today in brief, so-called "warning strikes" over GM's decision to call off a deal with Canadian parts maker Magna International Inc and Russian lender Sberbank.

GM's decision was an abrupt end to months of negotiations that saw Germany's government agree to provide financial aid for the Magna deal in September, clearing the way for the deal.

Industrial union IG Metall said workers at Opel's four German plants would halt work today, followed by similar moves tomorrow at other Opel locations in Europe. Opel has more than 25,000 workers in Germany. GM Europe, which employs 54,000 workers in total, also markets brands including Cadillac and Chevrolet in Europe. It also produces the Vauxhall brand in Britain.

GM once favored a rival bid by investment firm RHJ International, in part for fear that Magna and Sberbank could create competition for Chevrolet in Russia, a key market.

Earlier this year, GM's new, post-bankruptcy board had ordered management to consider more options, including keeping Opel, in part over worries that the company could lose control of shared GM-Opel technology and patents to competitors.

GM Chief Executive Fritz Henderson said GM will work with Europe's unions "to develop a plan for meaningful contributions to Opel's restructuring".

GM will first have to face indignation from German labor leaders. "We won't help shape the way back to General Motors," said Franz, the head of Opel's works council.

"Instead, we'll take up our classic function of defending the workers," he said without elaborating.

Franz said that GM's next step will likely be to try to seek help from governments and workers across Europe in a bid finance any restructuring, a move he said Opel workers were not keen on.

He said that workers' representatives won't agree to the "extortion" and will cancel concessions they had agreed to make to help the Magna deal go through.

Opel's employee council on Tuesday said that European workers had agreed with Magna to offer cost-cutting contributions worth 265 million euros a year. In Germany, workers had agreed to forego pay increases through 2011 and give up part of their traditional Christmas and summer bonuses.

Industrial union IG Metall also criticized GM's decision.

"This is an unbelievable action," Berthold Huber, the union's president, said. "Opel has been brought to this difficult situation, through years of mistakes by GM's management. Therefore, it's not likely that GM will be able to produce a viable solution" for Opel.

Ferdinand Dudenhoeffer, a professor of auto economics at the University of Duisburg-Essen, said GM appeared to be driving forward with the "highest possible risk" by not selling Opel.

He said the European market has seen lagging growth and boasts ferocious competition among car makers, including Volkswagen AG, Fiat SpA and PSA Peugeot Citroen SA.

Source:China Daily