Opel workers in Germany to strike

Opel employees walked off their jobs to attend a mass rally at the automaker's headquarters Thursday, protesting General Motors Co.'s decision to abandon the unit's sale to new owners the workers hoped would preserve jobs. Thousands of the 25,000 employees from Opel's four German factories vented their frustration and anger at GM, which after months of negotiations decided Tuesday to scrap the sale of a majority in Opel to Canadian auto parts maker Magna International Inc. and Russian lender Sberbank.

“Our trust (in GM) is now zero, and that is the heart of the problem,” Klaus Franz, the head of Opel's employee council, told thousands of workers in Ruesselsheim, winning applause.

Franz called on GM to come up with a viable plan for the automaker. “We are starting over again from zero,” he said.

GM's move has been heavily criticized by German politicians, who had given strong backing to the Magna deal. The employees fear GM's decision to restructure Adam Opel GmbH on its own could result in bigger layoffs and job cuts.

GM wants to slash costs by 30 percent at Opel, which would mean the elimination of about 10,000 jobs from a workforce of around 50,000, GM vice president John Smith told a telephone news conference.

The announcement came a day after the U.S. car maker stunned the auto sector by scrapping plans to sell the German-based unit, and just hours after Merkel gave a historic speech before a joint session of the U.S. Congress.

“Opel — the big piss-take,” screamed the front-page headline of the mass-selling Bild newspaper. “The Americans duped everyone.”

“It is truly tragic,” wrote the Berlin daily Der Tagesspiegel, calling the decision a “stinging slap in the face” for the chancellor.

“On the same day Merkel enjoyed her great triumph she also experienced her worst embarrassment. It's a disaster for German-U.S. relations.”

Merkel's government had invested major financial and political capital in saving Opel from insolvency before a September general election which she handily won. About half the company's employees work in Germany.

Beyond pledging 4.5 billion euros (US$6.6 billion) in German state aid for the ailing company, Berlin spent months shepherding a rescue deal.

Economy Minister Rainer Bruederle fumed that GM's U-turn was “totally unacceptable” while North Rhine-Westphalia state premier Juergen Ruettgers said the move showed “the ugly face of turbo-capitalism.”

But General Motors, which was struggling with a bankruptcy reorganisation backed by the U.S. and Canadian governments, said it was abandoning the agreed plan to sell Opel to Canadian auto parts manufacturer Magna and state-owned Russian bank Sberbank, and would restructure the unit itself.

ut General Motors, which was struggling with a bankruptcy reorganisation backed by the US and Canadian governments, said it was abandoning the agreed plan to sell Opel to Canadian auto parts manufacturer Magna and state-owned Russian bank Sberbank, and would restructure the unit itself. Related article: GM, Opel's 80-year union

GM also warned employees and unions that it could still allow Opel to flounder if the workforce upholds its threat to refuse wage concessions — a move blasted as “blackmail” Thursday by the daily Sueddeutsche Zeitung.

The company also estimated it would need three billion euros in state aid, and was confident it could secure the sum from the German government and other European countries where Opel and the British Vauxhall division have plants.

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