Word: deal
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Thousands of Opel workers in Germany are breathing a huge sigh of relief after the last-minute deal to rescue GM's European operations. German unions had always supported Austrian-Canadian company Magna International's takeover of GM Europe, wary that the rival bid from Fiat was just an attempt, as one union official put it, to "pinch German engineering." The unions regard Magna as an innovative company that put forward the best plan to secure the long-term future of Opel. At the carmaker's headquarters in the town of Rüsselsheim near Frankfurt, workers were hugging friends...
...After marathon talks on Friday night, the German government approved plans by the Austrian-Canadian car-parts manufacturer Magna to take over GM's European business. Under the deal, Opel will be placed in a trust and the German government will provide a bridging loan of $2.1 billion (€1.5 billion) to provide Opel with emergency funding and keep GM's European operations running. On top of that, the German government will give $4.3 billion (€3 billion) in loan guarantees. The Canadian firm would own 20% of the new group, Russia's biggest lender Sberbank would have...
...deal, which prevents German taxpayers' money from disappearing into the GM's all but empty coffers in the U.S., was a lifeline few Germans had expected. In the past, Chancellor Angela Merkel's conservative CDU party has steered clear of state intervention in the economy. But as the global downturn took its toll on German firms and the financial crisis brought a few major banks to its knees, Merkel has embarked on a big U-turn. First, there was the bail-out of the property lender Hypo Real Estate, then the part-nationalization of Germany's second biggest bank, Commerzbank...
...Economy Minister Karl-Theodor zu Guttenberg, a conservative politician from Angela Merkel's sister CSU party, criticized the deal to save Opel and apparently threatened to resign on Friday night when he was over-ruled. Guttenberg, a rising star in Merkel's coalition government, controversially suggested Opel should go into an "orderly insolvency" and he accused the government of risking billions for a short-term solution. "There is the danger the state could be blackmailed if it is too generous with state help even on one occasion," Guttenberg told the Welt am Sonntag newspaper on Sunday...
...Chancellor got her way. On Saturday, a beaming Angela Merkel held a news conference in Berlin to announce the breakthrough. There was no hiding her delight, and relief. "The deal is a real chance for Opel workers," Angela Merkel said. "The workers aren't responsible for this crisis. The mismanagement at GM in the U.S. was to blame," she said. (Read about Merkel in the TIME...