GM BOMBSHELL – Magna out & GM Europe heads for ‘restructuring in earnest’


GM, now owned by the US government, has dropped a bombshell by turning down its deal with Magna and the Russian state-owned Sberbank, at the last minute.

The GM Board decision is critical and was dictated by the fact that its main interest in Europe is now the Russian market. It feared that Magna’s link with Sberbank would see its technology in Russian hands, and GM would be involved in the near future in a struggle for the Russian market with Russian plants using its own technology.

GM’s message for Europe yesterday was that its Board ‘has decided to retain Opel and will initiate a restructuring of its European operations in earnest.’

GM is already well into ‘restructuring’ its US and Canadian operations. It has already closed up to 20 plants, sacked tens of thousands of workers, cut pay, holidays, and health and pensions benefits with enormous ruthlessness.

The GM decision to take back the European plants that it had planned to dump, means that they are going to be cut, closed and rationalised with the same, if not a greater ruthlessness, than has been shown to US workers.

The British government said yesterday it would work closely with General Motors, while the German leader Merkel called a cabinet meeting and is demanding repayment of its 1.5bn euro loan.

A spokesman for the British Department for Business said London wanted ‘to work closely with GM to understand their plan for the business and what it means for the UK’, noting the government ‘would be willing to provide funding’ if the ‘right long-term sustainable solution is identified’.

GM said yesterday it would soon present its restructuring plan to Germany and other governments and that the costs would amount to $4.4bn, less than the cost of the Magna operation.

Unite union co-chief Tony Woodley hailed the news as a ‘fantastic decision’, while the trade unions in Germany announced that they would be stopping work on Thursday and Friday.

Unite’s Woodley added to the BBC that GM’s news was an ‘incredible turnaround’.

‘The decision is in my view a fantastic decision and the right decision for General Motors themselves,’ he said.

‘There’s no logic in breaking up the company. I believe it is the right decision in spite of a good deal that we’d struck with Magna.’

Woodley’s track record in the GM crisis is one of treachery to the workers.

Initially, he supported the rival bid of the Belgian venture capitalist group to that of Magna.

He has dismissed from the start of the crisis that the GM plants in the UK should be nationalised. He supports the Brown government. Nationalisation is OK for the bankers but not for the workers.

When Magna seemed to have the contract in its grasp he switched to supporting it. His ‘good deal’ with Magna included a two year wage freeze, longer hours, pension cuts, speed-ups and no guarantee for either of the two UK GM plants beyond 2012.

Now he is backing GM whose record of ruthless rationalisations in the US is a warning to all European GM workers.

Not only are the two UK GM plants now in danger of closure, at best they face mass sackings and a ruthless speed up, as does every other plant in Europe.

Workers must insist that they will not be passed from employer to employer, each with a perspective of more and more devastating cuts or closures.

UK workers must demand that the Unite union changes policy and fights for the nationalisation of the UK plants and declares its readiness to occupy and call strike action to achieve it.

Unite must leave go of the coat-tails of the employers and the government that it is clinging onto.

Unite must also approach all of the European trade unions for an all union alliance to nationalise GM Europe and defend every job!