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GM Cancels Sale of Opel to Magna/Sberbank, Will Retain Company

General Motors Company (GM) has abandoned the sale of its European subsidiary Opel/Vauxhall to a consortium led by Canada-based parts maker Magna International and Russian lender Sherbank, and will initiate what the company calls an "earnest" restructuring of its European operations. The company says in a statement that the move is deemed to be the most stable and least costly approach for securing the Opel's long-term future. The Associated Press (AP) reports that German politicians are furious at the decision because the Magna restructuring plan would have kept all four German plants open; with the deal off, GM may opt for a restructuring plan that is less favorable to German workers. The Wall Street Journal reports that Russian government officials were also taken by surprise and plan to look at the legal aspects of the cancellation. AP says government and union officials in the United Kingdom, where the Vauxhall is manufactured, are supporting GM's decision, saying it is the best decision for the countries and the plants. GM did not offer an exact timetable on the European restructuring plan, but says it will present it "soon" and says time is of the essence.

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