GM Opts to Keep Opel

(Thumbnail image: BusinessWeek)

American automaker General Motors has backed out of selling its German division, Opel. Some see the surprise decision as a sign of a reviving automotive industry. (Opening video:Deutsche Welle)

But the reversal of a heavily negotiated agreement to sell to Canadian auto-parts maker Magna International  is causing a ripple effect of controversy in the countries that stood to benefit from the deal.

We’re tracking global perspectives from The Wall Street Journal, Russia Today, Der Spiegel, the BBC, and the CBC.

We begin with The Wall Street Journal, which analyzes GM’s rationale. They note that European buyers typically stay with one national manufacturer, posing a cultural challenge for GM.

“You can’t argue with the strategic reasoning as Opel provides key technology and platforms to the rest of GM’s global operations. It’s the business environment they’ll now have to focus on.”

A Russia Today analyst brings a perspective from a Russian automaker who stood to gain an Opel contract.  Without it, he says, the Russian auto market looks much weaker.

“This deal would have similarly very significant effects on the GAZ [Gorky Automotive Plant] plant who…were going to be producing GM cars under a license in some kind of way…we’ve got a situation where the car industry in Russia is really now struggling. It’s a significant problem.”

An editorial writer for German magazine Der Spiegel takes a similar view. He notes that GM is sure to make layoffs at Opel and says German Chancellor Angela Merkel's government has made a political misstep.

“The news is a debacle for Merkel. The chancellor has invested massive amounts of political capital in the attempt to save Opel, presenting herself and her government as the savior of German jobs.”

The BBC brings a more reserved perspective from an employee of Vauxhall, Opel’s UK affiliate. He says it's too early to know how this will affect workers.

“It remains to be seen I think. We’ve gone through about a year of insecurity and not knowing where we stand. We thought we had something organized with Magna where we knew how many job losses we had, but that’s gone through so now it’s all up in the air.”

Finally, an analyst for the Canadian Broadcasting Service looks at the news from the perspective of Magna’s founder Frank Stronach. They say while he wanted the deal, losing it may not be such a bad thing.

“This would have been his ‘in’ to the Russian market, which he really wanted to get in on Ann Marie. But he’s very stoic about all of this…Analysts have said he may have dodged a bullet here.”

What do you think, is GM wise to keep Opel? How will this affect the automotive industry?