Southfield (WWJ/AP) -- General Motors Co. says its board of directors has decided to keep its European Opel unit and will initiate a restructuring of its European operations in earnest.
The decision came Tuesday at a daylong meeting in Detroit, ending a year of uncertainty for the troubled Opel brand and its English sister, Vauxhall.
In a statement, President and CEO Fritz Henderson said, "GM will soon present its restructuring plan to Germany and other governments and hopes for its favorable consideration."
"We understand the complexity and length of this issue has been draining for all involved. 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," said Henderson.
GM's original plan, however, was to sell a 55 percent stake of Opel to Canadian auto parts maker Magna International and its partner, Russian lender Sberbank. The move came even though Opel's unions on Tuesday reached agreement with Magna for $390 million a year in cost cuts.
GM's board of directors determined that a 3 billion euros ($4.43 billion) restructuring plan was significantly lower than bids submitted for the division.
"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," said Henderson.
More details on the next steps in the restructuring will be provided as the plans and developments warrant.
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