Page last updated at 17:02 GMT, Tuesday, 15 September 2009 18:02 UK

Opel tries to get back to 'living cars'

Opel stand at Frankfurt motor show
The Opel Astra was unveiled under the slogan 'we live cars'

By Jorn Madslien
Business reporter, BBC News, Frankfurt

Wir leben Autos - we live cars.

The slogan - splashed across the Opel stand at the Frankfurt motor show - seemed to be more than a declaration.

As the European division of General Motors stepped up to launch its new Astra, the words came across as an emotional appeal from the 4,000 employees in Germany who have just been told their lives as Opel workers could soon be over.

Late last week, when it was announced that a consortium lead by the Canadian parts maker Magna would indeed take a controlling stake in Opel and its subsidiary Vauxhall, it was widely believed that an injection of 4.5bn euros (£4bn; $6.6bn) into the business by the German government would have helped insulate German jobs.

But on Monday at a press conference in Frankfurt, Magna announced that Germany would carry a larger-than-expected part of the burden as a plan to cut some 10,500 jobs in Europe gets underway.

Job cuts looming

Opel chairman Carl-Peter Forster at the press conference Tuesday morning
The Opel chairman was trying to have the focus return to the new Astra. But nobody was listening

With concerns about jobs threatening to overshadow the Astra launch, Opel chairman Carl-Peter Forster was quick to address the issue.

"In the current environment, where volumes have fallen 25-30%, in some markets 50%, a reduction in manpower is inevitable," he told BBC News in an interview.

But that, he added, did not mean decisions had been made about when and where jobs would be cut.

"The question is how you do it in detail, and this is what we have to discuss, so we can't tell you too much about it at the moment," he said.

Chinese wall

Mr Forster was eager to outline how he saw Opel's future under Magna.

In particular, he was keen to stress that General Motors will retain a 35% stake in the business, Magna and Russian Sberbank holding 27.5% each and company workers holding a 10% stake.

Rolls-royce being unveiled

Under this arrangement, there would still be strong links between Opel and its partial parent company GM, he stressed, in particular in terms of technology and purchasing cooperation.

Concerns that Magna would run into difficulty with Opel's rivals to whom it currently sells parts were also dismissed.

It does not seem to worry Daimler chief executive Dieter Zetsche, either.

"Magna has stated again and again that they will have two separate organisations with a Chinese wall in between them," he said during a press briefing on Tuesday. "I have no problem with that."

European involvement

Nevertheless, with renewed levels of uncertainty creeping back into this long-running saga, just days after German Chancellor Angela Merkel announced the Magna deal, it is clear that the widely anticipated cross-border horse trading has started, with other European governments getting involved.

Belgium, whose Opel plant in Antwerp might close under Magna, has called on the European Commission to investigate the Opel sale and the involvement of the German government, which has offered 4.5bn in financial assistance to Opel.

UK Business Secretary Lord Mandelson, meanwhile, has insisted that any financial assistance offered by Germany should not provide the basis for where jobs are cut.

"I think it is important to say that the Commission should not accept anything that looks like a political fix or any linkage between aid and retention of jobs in any specific plant or country," he told the BBC this week.

Mr Forster stressed that "any final decision on restructuring Opel would be based on facts, not on politics".

But that did little to mollify Spain, where the future of an Opel plant in Zaragosa is at stake.

Calling for a European solution to replace the agreed Magna-deal, Spanish Industry Minister Miguel Sebastian was clear in his verdict.

"The more we know about the Magna option, the less we like it," he said.

Runaway story

At the motor show, meanwhile, Mr Forster was trying to have the focus return to the new Astra, which will cost some 600 euros less than its chief rival, the Volkswagen Golf.

But nobody was listening.

It is clear that the story surrounding the sale of Opel is far from over yet, and though serious efforts are being made to do so, nobody seems able to control what will happen next.

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