GM keeps Opel despite German protest

US automaker General Motors is deciding to retain its German Opel unit and re-organize it, a move which is angering the German government.

GM says the decision is based on improved business conditions and the strategic importance of Opel to its operations.

GM's decision was made after a meeting of its 13-member board.

It ended protracted negotiations that began earlier this year. The decision reversed a plan to sell Opel to Canada's Magna and its Russian partner, Sberbank.

Under the terms of the deal agreed with Magna and Sberbank, each would have received a 27.5-percent stake in the German Opel unit. GM would have kept 35 percent, while GM employees would have acquired the remaining 10 percent.

Germany says the GM's decision is unacceptable.

Rainer Bruederle, German Economy Minister, said, "The conduct of General Motors toward the workers at Opel is completely unacceptable. The conduct of General Motors toward Germany is completely unacceptable. General Motors has to take the responsibility for this development alone."

GM expects Opel's reorganization plan to cost about 3 billion euros, or about 4.4 billion US dollars.

The US auto maker will now submit a restructuring plan to Germany and other governments.

Auto analysts say that keeping Opel will allow GM to maintain control of vehicle development, and to share parts across a few global platforms.

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