General Motors’ decision to hold onto Opel has provoked an outcry in Germany and completely overshadowed Chancellor Merkel’s address to a joint session of the US Congress.
Merkel had invested a lot of political capital in getting the sale to Magna through in a bid to save jobs. The Unions had made sacrifices, too, in an agreement which they have now ripped up in anger.
But essentially it looks as though GM’s rescue plan is very similar to Magna’s. Ten thousand jobs will go as GM restructures Opel, but where will the axe fall in Europe? With Magna, the unions thought they knew.
Now the Opel managers will be back in charge, and with GM having paid back some of the financial support it received and willing to repay all the government aid to keep the company afloat over the summer, it will be under no obligation to save German jobs.
“The workers have been on an emotional roller coaster in the last few months, not knowing what the future would bring, or whether their livelihoods were secure. I think that is the highest responsibility of General Motors’ management: to ensure that now, immediately, job security returns,” said the metalworkers union’s Peter Scherrer.
It is thought the Magna deal would have preserved more German jobs, but after such a surprise from GM no-one is ruling out more losses. For the moment, unions and politicians are waiting to see what the American parent’s next move will be.