Germany's politicians fumed with anger and Opel workers canceled cost concessions and readied walkouts after General Motors Co. abandoned the sale of its European subsidiary to parts maker Magna International and Russian lender Sberbank.
Their fear is that restructuring by GM aimed at restoring profitability to its European operations will mean deeper job cuts than Magna was planning.
Klaus Franz, Adam Opel GmbH's top employee representative, called it a "black day" and said workers would start brief work stoppages Thursday.
GM's decision Tuesday to abandon the deal was a sharp blow to government and labor officials who supported it as the restructuring option that would save the most jobs in Germany.
The German government had put up a euro1.5 billion ($2.2 million) bridge loan to keep Opel afloat as a buyer was sought, and promised euro4.5 billion in further financing so Magna International Inc. and Sberbank could take a 55 percent stake.
Magna had said it planned to cut about 10,500 of the 50,000 Opel jobs in Europe, with less than half the job cuts, or around 4,500, in Germany. It also said it would keep all four German plants open.
With the deal now off, German workers face the prospect of a restructuring that is less favorable to them.
The cancellation took the newly elected government by surprise, coming just after Chancellor Angela Merkel left the U.S. after a well-received speech to a joint session of Congress. GM is majority owned by the U.S. government.
In Berlin, Economy Minister Rainer Bruederle vowed Wednesday to recover the euro1.5 billion in bridge financing.
"We will get the taxpayers' money back," he told reporters, adding that GM's move was "totally unacceptable."
GM Europe spokeswoman Karin Kirchner said the company was prepared to repay the money. "If we're asked, GM will repay the bridge loan in question," she said.
Kirchner raised the prospect that GM could put Opel through bankruptcy restructuring if unions blocked restructuring. A failure "to reach the needed restructuring would result in the operation becoming insolvent, an unnecessary and undesirable outcome for all involved," she said.
GM's decision also caught the Russian government unawares. Dmitry Peskov, spokesman for Russian Prime Minister Vladimir Putin, called it "astonishing."
The mood was opposite in Britain, where GM Europe builds its Vauxhall brands. British workers had feared the strong German government support  for Magna meant they -- along with Opel workers in Spain and Belgium -- would take the brunt of any restructuring. (continued...)
© 2009 Associated Press under contract with YellowBrix. All rights reserved.
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