Berlin angry after GM decides to keep Opel (1st Lead)

Berlin - The German government responded angrily Wednesday to General Motors' decision to keep its European subsidiary Opel after months of government coaxing to spin off the maker of small and medium-sized Opel and Vauxhall cars into new ownership. The decision divided labour groups. The elected leader of Opel's German labour force ordered strikes in Germany on Thursday in protest, but unions in Britain and Poland welcomed the decision as offering fresh hope to factories in those countries. GM's European subsidiary also has factories in Spain, Belgium and Austria. About half of Opel's 50,000 workers are employed in Germany. In Berlin, Economics Minister Rainer Bruederle called GM's behaviour 'entirely unacceptable.' Bruderle, who took office last week, said he had been sceptical as an opposition politician about Berlin's long-drawn-out efforts to spin off the company. 'Unfortunately it seems my doubts were correct,' he said. The federal cabinet was to discuss the crisis Wednesday. Germany gave Opel a bridging loan of 1.5 billion euros (2.2 billion dollars) earlier this year to keep the factories running. That loan was arranged with help from several of Germany's state premiers. One, Roland Koch of Hesse, where the main Opel factory is located, demanded GM repay the bridging loan by the end of this month. Bruederle agreed. In a written statement Koch expressed 'shock' and 'anger' at the decision. 'In light of the negative experiences of the past years with GM's business strategy, I am very worried about the future of this firm and its jobs,' he said. 'This behaviour by General Motors shows the ugly face of turbo-capitalism,' said Juergen Ruettgers, premier of another state, North Rhine Westphalia, where Opel accounts for 6,000 jobs. Germany had supported plans by Magna, a maker of car parts in Canada and Austria, and Russian bank Sberbank to take a controlling interest in Opel, which has been part of the GM empire since 1929. Politicians have spent months negotiating on the issues, and Opel's fate has filled the German media for much of the year. In Britain, GM's decision was welcomed by trade unionists, who had feared that a German-backed Magna deal could lead to the closure of factories belonging to Opel's British brand, Vauxhall. 'This is the best decision for Great Britain and our factories,' said Tony Woodley, head of the trade union Unite. Vauxhall's factories in Ellesmere Port and Luton employ 5,500 people. In Poland, where Opel has a factory at Gliwice, a union leader said GM's decision meant fewer fears for workers. Miroslaw Rzezniczek, deputy leader of the Solidarnosc branch in the factory, told the German Press Agency dpa that workers had perceived a Magna takeover as meaning political interference. Poles also feared Sberbank's role meant Russian domination. A deal to 'save' Opel by selling it to Magna and pumping another 3 billion euros of German money into it had broad public support in Germany and was a key issue ahead of the September general election. Explaining the cancellation, the Opel company issued a statement saying, 'Opel and the British sister brand Vauxhall play a decisive role in the global GM concern - a position that GM does not want to surrender.' The Opel labour representation council in Germany withdrew an offer to forfeit holiday pay and some salary to help Opel restructure. It had agreed with Magna on those cuts the previous day. The council demanded GM pay up. Rainer Einenkel of the workers' council at another factory, in Bochum, said the government still had an obligation to support Opel financially. 'I don't think the federal government can get out of this agreement. And I don't think it should be allowed to either.' Einenkel accused the government of flip-flopping over whether to peg its state aid purely to a Magna deal or to make it available to any new owner, as the EU Commission had demanded. 'This is the point when General Motors says: If anyone can get the money to keep the factories going, then so can we,' he said.