German workers protest GM's Opel reversal

Associated Press / Associated Press

Ruesselsheim, Germany -- Fearing widespread layoffs, thousands of Opel workers walked off the job across Germany on Thursday to protest General Motors Co.'s decision to abandon the unit's sale to new owners.

Their indignation was echoed by German and Russian politicians, who had strongly supported the now-scrapped sale of a majority in Opel to Canadian auto parts maker Magna International Inc. and Russian lender Sberbank.

Russian Prime Minister Vladimir Putin asserted that GM had exhibited an "arrogant attitude" in abandoning months of negotiations. German Foreign Minister Guido Westerwelle, visiting Washington, said that "jobs must be protected."

Workers at Opel's headquarters in Ruesselsheim vented their frustration and anger at a rally. One group carried a black coffin with the GM and Opel logos; others held placards such as "GM get lost" and "Hands off Opel."

"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 the workers. "We will stand together and fight for our future. We will not be defeated, we are proud, we are Opel."

Organizers estimated that 10,000 workers attended, while police put the figure at 6,000. Smaller rallies were held at factories in Bochum, Eisenach and Kaiserslautern.

German Chancellor Angela Merkel's office said she had discussed it with President Barack Obama, who told her he had no involvement in Tuesday's decision by the board of the majority government-owned company.

Merkel spokesman Ulrich Wilhelm said she spoke with Obama Wednesday evening and the two agreed to remain in contact on the issue. Merkel told him the government would press for GM quickly to put forward a new plan for Opel.

GM's decision was an embarrassment to Merkel, coming hours after she had addressed the U.S. Congress. German officials swiftly demanded a restructuring plan from Detroit and vowed to recover by Nov. 30 a euro1.5 billion ($2.2 billion) bridge loan granted to keep Opel afloat as a buyer was sought.

Westerwelle said he would make clear in Washington that "the money granted must be paid back."

German workers worry GM will make even more cuts to return Opel to profit than Magna would have. Still, the decision won a cautious welcome from union officials in Britain and Poland, where workers had feared possible cutbacks in a Magna takeover.

Franz, the German union leader, urged GM to come up with a viable plan for Adam Opel GmbH. He argued that Opel should have a more independent status and "no longer be an appendage of GM."

Unions and employees had offered cost-cutting concessions to ease a Magna deal, such as forgoing pay increases, but those offers are now off the table.

GM will face a new battle to secure concessions for its own restructuring plan -- and has raised the prospect of a bankruptcy if it is blocked.

"Stop the talk about insolvency -- that is damaging to the business," Franz said.

John Smith, GM's chief negotiator for the sale of Opel, said Wednesday that GM's plan was similar but not identical to that presented by Magna and Sberbank, which had called for the elimination of 10,500 European jobs or about 20 percent of the work force. He did not elaborate on possible cuts.

On Thursday, GM CEO Fritz Henderson said in Detroit that the company could tap some of the $50 billion in aid it has received from the U.S. government to help finance the Opel plan.

However, Henderson said it would do so only if necessary and would try to finance the estimated euro3 billion restructuring with loans from European countries, money generated by Opel and by reducing royalties that Opel pays GM for use of technology.

Germany offered billions in aid for the planned Magna deal. Officials have been noncommittal about possible aid for the new plan, saying they need details and word on how much money GM itself will provide.

"We expect the management now to say what they can (contribute) alone," said Roland Koch, the governor of Hesse state, where Ruesselsheim is located.

AP Writer Nataliya Vasilyeva in Moscow contributed to this report.