views

GM reverses out of sale of Europe arm

GENERAL Motors last night ditched its plan to sell Opel and Vauxhall as new figures showed a sales lift at the recession-hit US giant.<br /><br />The company had agreed to sell Opel and Vauxhall to Canadian car parts firm Magna after months of tough negotiations.<br /><br />The deal had the backing of the German government, which&nbsp; pledged &euro;4.5bn (&pound;4bn) of loans.<br /><br />But GM chiefs have now turned their back on the agreement &ndash; sending shockwaves through the industry. <br /><br />Fritz Henderson, president and chief executive of General Motors, said the decision followed figures showing GM&rsquo;s improved financial health.<br /><br />In a statement he said: &ldquo;We understand the complexity and length of this issue has been draining for all involved.<br /><br />&ldquo;However, from the outset, our goal has been to secure the best long-term solution for our customers, employees, suppliers and dealers, which is reflected in the decision reached today.&rdquo;<br /><br />The announcement came as the firm reported a 4.7 per cent jump in sales in October compared with the same month last year. GM&rsquo;s monthly sales last rose in January 2008.<br /><br />Meanwhile sales at rival Ford were up by three per cent, further fuelling hope of a recovery in the motor industry. GM said it would now &ldquo;initiate a restructuring of its European operations in earnest&rdquo; and appeal for aid from Germany and other European states.