GM grapples with Saab, Opel

General Motors cast around for fresh options for Sweden's loss-making Saab after the collapse of its sale added another dimension to tortuous European restructuring plans.

Earlier this month the U.S. automaker backtracked on months of talks to sell a majority stake in Opel to a consortium led by Canada's Magna International, opting to keep and revamp the business itself.

GM outlined the scale of job losses needed to get the struggling Germany-focused unit back on track and acting GM Europe head Nick Reilly said the turmoil unleashed by the failure of the Saab deal would not affect Opel.

Reilly said the company would cut around 9,000 jobs in Europe, of which 50-60 percent were in Germany.

He added that no final plans on job cuts had been made, ahead of consultations with labor representatives, which he hoped would be wrapped up in December.

Reilly confirmed that the future of Opel's Antwerp plant, which has often been mentioned as a likely candidate for closure, was uncertain.

The U.S. automaker emerged from bankruptcy in July and is fighting to redefine itself after falling victim to the worldwide auto crisis last year.

Some analysts say the European market in which Opel and Saab operate is burdened with as much as 20 percent too much capacity.

On Tuesday GM's deal to sell Saab to niche luxury carmaker Koenigsegg, backed by China's BAIC, collapsed after the buyer walked away.

SAAB'S UNCERTAIN FUTURE

Trolhattan, Sweden-based Saab, which has not made a profit since 2001, was facing uncertainty on Wednesday. Joran Hagglund, state secretary at Sweden's Industry Ministry, said GM appeared to still harbor hope of being able to sell Saab.

The Swedish government had effectively ruled out a state bailout of the 60-year-old auto brand, saying on Tuesday that a private buyer was the only option for Saab.

GM's board has a regular monthly meeting scheduled next week, and the question of what to do with Saab will now lead the agenda, a person with direct knowledge of the situation said on Tuesday.

No other bidders have so far emerged for the brand, meaning GM's only options would be to restart the sale process or to wind down the business, the more likely option, the person said.

BAIC, which had been part of the Koenigsegg-led consortium negotiating for Saab, said it was studying its options and reiterated its commitment to become more international. Analysts said it was unlikely to bid for the whole of Saab alone, but might buy some of the assets.

OPEL REVAMP PLAN

Reilly had said earlier this week that GM would cut between 9,000 and 9,500 jobs out of the 50,000 strong workforce at Opel and British sister brand Vauxhall as part of the 3.3 billion euro ($4.92 billion) plan.

Opel denied media reports on Wednesday that it planned to cut 5,300 jobs at German sites, saying the figure was far too high.

Opel labor leaders led months of tense negotiations with Magna when it was set to buy the unit, in an attempt to preserve jobs and prevent factory closures.

Meeting state premiers on Tuesday at Opel's Ruesselsheim headquarters, Reilly sought to reassure German workers -- which make up around half of Opel's headcount.

"We have transferred our European headquarters to Ruesselsheim. That shows how important this site will be for us in future," he told reporters after meeting Hesse state premier Roland Koch. He added that Opel's Eisenbach plant was also very important.

Reilly said GM had not yet received any binding commitments for state aid. He later added that he had had a "reasonably good" response on willingness from countries including Germany to provide state aid for Opel.

Opel had had pledges of state support from countries and regions with production sites when it was due to be sold to Magna.

- Reuters