04 Nov 09 13:08
5,000 British jobs saved
General Motors has performed a dramatic U-turn over the fate of Opel/Vauxhall after the board decided to keep its European arm.
Opel was due to be sold to Canadian-based parts manufacturer Magna but thanks to 'an improving business environment for GM over the past few months' the GM board decided to hold onto its European operation.
The announcement has been greeted with mixed feelings.
In the UK unions are celebrating the saving of the 5,000 British jobs Magna had threatened to axe, but in Germany the decision to not go ahead with the sale has provoked a mass walk-out from German plants, beginning Thursday.
In what has been described as a massive embarrassment for the German government, economy minister Rainer Bruederle has declared his country will claw back the £1.3bn taxpayers' loan to keep Opel afloat during the negotiations with Magna.
The controversial loan was paid out on the condition that no German jobs would be sacrificed as part of the sale, although the European Commission warned last month that such a loan could breach strict competition rules.
Meanwhile, business secretary Lord Mandelson has cautiously welcomed the GM's decision and has declared he is keen to have discussions on how GM's plans will affect British jobs.
