Opel deal could bring Russian economy in from cold
The sale of GM's European unit to a Canadian-Russian consortium could help diversify Russia's energy-focused economy.
The news that US auto giant General Motors had decided to sell a majority stake in its European operations to a Canadian-Russian consortium was lauded by German chancellor Angela Merkel as a victory for her ruling Christian Democratic Union, just weeks before a federal election.Skip to next paragraph
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"This has shown the patience and the singlemindedness of the federal government has paid off," she said yesterday in Berlin.
Opel, the company GM agreed to sell, employs 55,000 workers in Europe, half of whom are in Germany. In recent weeks, Mrs. Merkel and her deputies have lobbied the US government hard for a long-delayed deal to be finalized and German jobs to be secured.
The deal is contingent on German labor unions agreeing to a restructuring of four Opel plants, and negotiations between the two sides are expected to be difficult. This could lead to some job losses, although they are not expected until after the German general election on Sept. 27.
The deal has been months in the making. Many GM executives were initially wary of the Berlin-backed consortium that they finally chose to do business with, made up of Magna International, a Canadian auto-parts company, and Sberbank, the largest bank in Russia. They considered others buyers, as well simply allowing Opel to fail.
Good reason to support Russian deal
Officials were especially concerned about Russian involvement, worried that GM technology would fall into the hands of GAZ, the Russian automaker which will take over Opel production in Russia, and a possible competitor to GM. In 2008, the Detroit-based company held an 11 percent market share in Russia.
The deal does include some limits on technology transfer, according to news reports.
GAZ's ties to the Kremlin have also raised eyebrows. Russian Prime Minister Vladimir Putin was a vocal backer of the Magna-Sberbank bid, and GAZ owner Oleg Deripaska has a close relationship with the Russian government.
Analysts also said that the plan was troubling to some because it deepened ties between Germany and Russia at a time when the economic interests of the two are becoming increasingly interconnected.