GM reverses out of sale of Europe arm
GENERAL Motors last night ditched its plan to sell Opel and Vauxhall as new figures showed a sales lift at the recession-hit US giant.
The company had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna after months of tough negotiations.
The deal had the backing of the German government, which pledged €4.5bn (£4bn) of loans.
But GM chiefs have now turned their back on the agreement – sending shockwaves through the industry.
Fritz Henderson, president and chief executive of General Motors, said the decision followed figures showing GM’s improved financial health.
In a statement he said: “We understand the complexity and length of this issue has been draining for all involved.
“However, from the outset, our goal has been to secure the best long-term solution for our customers, employees, suppliers and dealers, which is reflected in the decision reached today.”
The announcement came as the firm reported a 4.7 per cent jump in sales in October compared with the same month last year. GM’s monthly sales last rose in January 2008.
Meanwhile sales at rival Ford were up by three per cent, further fuelling hope of a recovery in the motor industry. GM said it would now “initiate a restructuring of its European operations in earnest” and appeal for aid from Germany and other European states.