The Board of Directors at reorganized General Motors Company has decided to keep Opel and Vauxhall and will initiate a restructuring of its European operations “in earnest,” it said late today in a statement.
“GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration,” said Fritz Henderson, president and CEO. “We understand the complexity and length of this issue has been draining for all involved. However, from the outset, our goal has been to secure the best long-term solution for our customers, employee, suppliers, and dealers, which is reflected in the decision reached today. This was deemed to be the most stable and least costly approach for securing Opel/Vauxhall’s long-term future.”
GM said its plan entails total restructuring expenses of about €3 billion, significantly lower than all bids submitted as part of the investor solicitation.
GM will work with all European labor unions to develop a plan for “meaningful contributions” to Opel’s restructuring.
While Opel continues to “outperform against its viability plan assumptions and immediate liquidity is stable,” time is of the essence.
“While strained, the business environment in Europe has improved.” Henderson said. “At the same time, GM’s overall financial health and stability have improved significantly over the past few months, giving us confidence that the European business can be successfully restructured. We are grateful for the hard work of the German and other EU governments in navigating this difficult economic period. We’re also appreciative of the effort put forward by Magna and its partners in Russia in trying to reach an equitable agreement.”
Henderson added that GM also hopes to build on its already significant business in Russia and to resume work directly with GAZ to contribute to both the modernization of its operations and the joint development of the Russian vehicle market on a mutually attractive basis. More details on the next steps in the restructuring will be provided as the plans and developments warrant.