Germany picks Magna to save Opel
Germany has agreed a deal with Magna International, a Canadian car parts maker, to take over Opel, part of the European wing of US carmaker GM. German Finance Minister Peer Steinbrueck told journalists outside the chancellery shortly after 0200 local time on Saturday morning that a deal had been agreed. The German government is expected to provide an immediate loan facility of 1.5bn euros ($2.1bn, £1.3bn). The Magna deal should protect Opel if GM files for bankruptcy protection in the US on Monday, as is expected. The Canadian company has said it will put more than 500m euros ($700m; £435m) into Opel, which employs more than 25,000 people in Germany.Before the announcement of the deal, Magna said it planned to cut 2,500 jobs in Germany, about 10% of Opel's workforce in that country. Italy's Fiat, a former potential bidder, had said it would cut 10,000 jobs. GM operations in Europe will now be placed under the care of a trustee to shield them from the parent company's filing for bankruptcy protection in the US. By doing this the Germans have ringfenced Opel from the mother company and this has been achieved.
On Friday, a court in Sweden granted Saab, GM's other European business, an extension to its protection from creditors. The Swedish car maker first sought protection in February. It now has until 20 August to line up a new owner and to restructure its business. Saab is being sold off by GM separately.