GM says it will keep Opel

DETROIT, Nov. 3 (UPI) -- U.S. automaker GM Co. said Tuesday business is looking up so it's not going to sell its Opel division.

GM said on its Web Site that its board of directors has decided to initiate a major makeover of its European operations.

"GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration," GM Chief Executive Officer Fritz Henderson said.

GM had been negotiating to sell its German brand, Opel, and British unit, Vauxhill, to Canadian auto parts maker Magna International and Russian lender Sberbank.

"We understand the complexity and length of this issue has been draining for all involved," Henderson said. "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 initial estimate is the restructuring will cost about $4.4 billion, which is said is significantly less than all bids it had received. The U.S. company said it will seek what it called meaningful contributions from European labor unions representing Opel workers. Time, it said, is of the essence, though Opel continues to outperform expectations and immediate liquidity is stable.

"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."