Wednesday, September 23, 2009

Europe Cries Foul Over Germany/General Motors Deal

Workers and governments in several European nations are angry over Germany's role in General Motors sale of their European-based Opel brand to a Canadian/Russian consortium. You might remember this post from a few weeks ago about the wheels almost coming off the deal when GM became worried that one of the half of the consortium - Russia's Sberbank, which has close ties to the Kremlin - would funnel GM trade secrets to the Russian auto industry.

Germany's Chancellor Angela Merkel stepped in and threw her weight behind the Sberbank consortium keeping the sale on-track. But now accusations are flying that Merkel in fact cut a deal with Opel and the Russians to protect German jobs. Along with the sale comes a restructuring of Opel, and that means job cuts, about 11,000 of them it's estimated, and the vast majority of them apparently will be outside of Germany.

This is causing some anger around Europe, not the least of which at the Opel factory outside of Antwerp, where thousands of workers staged a mass protest. The factory is facing heavy job cuts even though the Belgians say is their plant is more efficient than Opel plants in Germany that aren't in line for a major restructuring. That has government officials in Belgium, Spain and the United Kingdom suggesting that the German and Russian governments cut a deal for German support of the sale in return for Opel's German factories not facing the job-cutting axe. This is also feeding into lingering unease in some parts of Europe over the close economic relations between Germany and Russia.

Germany's opinion though is that closer economic ties with Russia will bind it closer to Europe and make it a more reliable trading partner in the future.
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