Unrest after GM scraps Opel sale

German unions have called for strike action over Opel-Vauxhall sell-off U-turn

General Motors's decision to scrap the sale of European subsidiary Opel has raised new uncertainty over the unit's future, astonishing politicians in Germany and Russia, and prompting workers to plan walkouts in protest.

The GM board's unexpected decision to call off the sale to auto parts maker Magna International and Russian lender Sberbank was a startling end to months of haggling in which Chancellor Angela Merkel and other German leaders had strongly backed the deal.

Now German workers worry GM will make even more cuts to return Opel to profit than Magna would have.

Still, the decision won a cautious welcome from union officials in Britain and Poland, where workers had feared possible cutbacks in a Magna takeover. GM's decision handed Ms Merkel's new centre-right coalition government an unwelcome test just a week after taking office.

German officials swiftly demanded a restructuring plan from Detroit and vowed to recover by November 30 a £1.3 billion bridge loan granted to keep Opel afloat as a buyer was sought. "We will get the taxpayers' money back," new economy minister Rainer Bruederle told reporters. "Dealing with employees in this way eight weeks before Christmas is in no way acceptable," he added.

John Smith, GM's chief negotiator for the sale of Opel, said the US car maker would repay the loan "if we're requested to do so" by Germany. "We've already begun to repay some of the bridge loan," Mr Smith told reporters in a conference call.

Ms Merkel, who was flying home from a speech to the US Congress when GM announced its decision, made no public comment, but officials made clear their annoyance. Spokesman Ulrich Wilhelm criticised GM's "surprising 180-degree turn" and said Ms Merkel may soon speak with President Barack Obama about the issue. GM is majority owned by the US government, which said it wasn't involved in the decision to keep Opel.

Ms Merkel spoke with Opel's chief employee representative, Klaus Franz, who said it was "a black day for Opel". There was a furious reaction from the governor of Germany's most populous state, North Rhine-Westphalia - which is home to Opel's Bochum plant and holds elections next May that will offer a crucial test for Ms Merkel's new governing coalition.

"After many promises and months of negotiations ... GM has left workers out in the cold," said Juergen Ruettgers, a deputy leader of Ms Merkel's party. "This attitude from General Motors shows the ugly face of turbo capitalism. It is completely unacceptable."

Russia, which had backed the Magna-Sberbank plan, also was caught by surprise. "The decision by GM to turn down the deal was astonishing," state news agencies quoted Prime Minister Vladimir Putin's spokesman, Dmitry Peskov, as saying.