Opel set to break away from GM, Vauxhall also part of the deal

28 February 2009

After Swedish carmaker Saab unshackled the chains that bound it to General Motors, two other subsidiaries are set to follow suit. (See: Swedish carmaker Saab looking to separate from parent GM, files for bankruptcy)

Troubled German carmaker Opel is in effect to become independent from its parent company General Motors after 80 years, under restructuring plans announced by its supervisory board. The move will also see Vauxhall, which represents General Motors in the UK, rolled into the newly restructured company and spun off from its US parent.

Hans Dechant, the head of Adam Opel GmbH said that the carmaker would "largely detach" itself from GM and reorganise as a joint-stock company to lure investors and state backing to save it from insolvency.

Following weeks of speculation about Opel's fate, GM Europe President Carl-Peter Forster told a news conference the German carmaker would be split off into a separate unit to be majority owned by its struggling US parent.

Under the plan, outside investors would take a stake of more than a quarter, bringing an end to Opel's 80 years as a wholly-owned unit of GM. Opel's UK affiliates Vauxhall would be part of the spun-off unit.

"There are still no decisions about plant closures or forced layoffs," Forster said. He added, however, that GM would be willing to sell a production site if that would help reduce overcapacity while securing jobs.