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September 14, 2009

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Home » Business » Auto

EU warns of action in Opel sale

THE European Union's competition commissioner has warned that she would take action against any protectionism in the sale of General Motors Co's European unit, Opel.

Belgium wants the European Commission to investigate the Adem Opel GmbH deal amid concern that Germany may have sought to protect its own plants at the cost of others.

GM announced last Thursday that a majority of Opel would be sold to Canadian auto parts maker Magna International Inc and Russia's Sberbank, which Germany had pushed hard for. The deal likely would see a plant in Antwerp, Belgium, close, while the company's four German plants remain open.

Germany offered 4.5 billion euros (US$6.5 billion) in credit to support the Magna bid.

"State support should not be subject to noncommercial conditions such as the location of investments and restructuring measures," EU Competition Commissioner Neelie Kroes was quoted on Saturday as telling Belgian newspaper De Tijd. "If something happens against the rules, I will take action."

Thursday's deal was a victory for German Chancellor Angela Merkel before elections on September 27. Still, some members of the interim trust that has held a majority in Opel since June questioned what they saw as a politically motivated decision.

Dirk Pfeil, a trustee who abstained in a vote on the deal, said he leaned toward a rival bid from investor RHJ International, which he said "spared German jobs less and took more account of there also being a European component."

"The RHJ concept was simply more Euro-compatible," he told Deutschlandfunk radio.

Economy Minister Karl-Theodor zu Guttenberg suggested Magna's bid would involve more job cuts than first thought. "All involved knew since spring, also employee representatives ... that the number named by Magna applies only to the area of production, and that further job-cutting by Magna was to be feared in the administrative area," Guttenberg was quoted in Bild am Sonntag newspaper.


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