WRAPUP 2-Russia says GM pouring U.S. scorn on Europe

By Darya Korsunskaya and Christiaan Hetzner

MOSCOW/RUSSELSHEIM, Germany, Nov 5 (Reuters) - Russia accused General Motors of showing the United States' scorn of business with Europe by abandoning its sale of Opel, whose German workers went on strike on Thursday.

Thousands of auto workers protested at German factories, demanding independence from a company they said had betrayed them by reversing a decision to sell a majority stake in Opel to a Russian-backed consortium.

GM's chief executive sought to soothe the anger by saying the company was 'able to run a global business' after it backed out on Tuesday of the deal to sell to Canada's Magna and its Russian partner Sberbank.

And German Chancellor Angela Merkel agreed with U.S. President Barack Obama to coordinate on the future of Opel after strong criticism of GM's move from members of her government.

But Russian Prime Minister Vladimir Putin said the about-face after months of talks would leave a bitter taste in some European mouths.

'We will have to take into account this style of dealing with partners in the future, though this scornful approach toward partners mainly affects the Europeans, not us,' Putin told a cabinet meeting in Moscow.

'GM did not warn anyone, did not speak to anyone ... despite all the agreements reached and documents signed. Well, I think it is a good lesson.'

German officials have condemned GM's decision, which coincided with Chancellor Angela Merkel's trip to Washington when she made her first address by a German leader to the joint U.S. Congress since 1957, and demanded the return of a loan.

A member of a German trust overseeing Opel told Reuters on Wednesday that Opel owes German state and federal governments about 900 million euros.

Germany viewed Magna and Sberbank as most likely to preserve as many German jobs and plants as possible. Half of Opel's 50,000 staff are based in Germany.



FIGHT FOR OPEL

Hesse state Premier Roland Koch -- one of the biggest lobbyists for a sale to Magna and its Russian partner Sberbank -- told rallying workers at Opel headquarters on Thursday that he would fight for Opel.

'We want Opel to continue to exist,' he said, warning GM not to 'maximise profits by taking German workers hostage'.

Several workers said they did not believe the company could preserve its European arm, blaming it for incompetence.

'We don't need sex because management screws us every day,' read one banner held by a protester in Ruesselsheim.

GM chief executive, Fritz Henderson, said the company would pay back the bridging loan from the German government and tried to soothe concerns about his company's ability to run a company by saying 'we are able to run a global business'.

British Business Secretary Peter Mandelson said earlier that the decision would benefit European taxpayers, especially in Britain, Germany and Spain, and that workers at GM's Vauxhall unit in Britain would prefer to keep the same management.

Vauxhall employs about 5,500 people.

Countries with GM-owned plants, Germany, Britain, Spain and Belgium, were originally expected to provide aid for the rescue of loss-making Opel. GM said it expected a restructuring of Opel on its own would cost about 3 billion euros.

'Now this is creating uncertainty and some fresh fears amongst Opel and Vauxhall workers,' Mandelson told Brussels-based reporters in a video link-up from London.

'On the other hand, it will be a significantly less costly deal for European taxpayers, notably German, British and Spanish taxpayers.'

(writing by Elizabeth Piper; editing by Andrew Callus)

(([e-mail]; RM [e-mail]; [phone]))

Keywords: GM OPEL/



* German workers protest in anger at U-turn

* GM's Henderson says will repay bridging loan

* Merkel, Obama to coordinate on Opel's future



(Adds detail on comments by GM, Merkel)

By Kevin Krolicki and Christiaan Hetzner

DETROIT/RUSSELSHEIM, Germany, Nov 5 (Reuters) - General Motors Co on Thursday said it was readying a plan to restructure Opel and could pay off debt due this month as German workers went on strike to protest the automakers decision to keep the European unit.

Thousands of auto workers put down tools at German factories, saying GM had betrayed their interests by reversing a decision to sell a majority stake in Opel to a Russian-backed consortium led by Magna International.

GM's board decided earlier this week to keep Opel -- stepping away from months of painstaking negotiations -- and to seek government aid in Europe for a restructuring plan expected to cut thousand of jobs.

About half of Opel's 50,000 workers are in Germany, where government aid to support the GM unit has been a source of controversy for the government of Chancellor Angela Merkel.

Merkel, who lobbied for the Magna-led takeover of Opel, raised her concern over GM's decision with U.S. President Barack Obama. In a telephone conversation with Merkel late on Wednesday, Obama said he had not been involved in the surprise decision by the GM board which has angered the German government, representatives of both sides said.

'The Chancellor made clear that the German government would urge General Motors to present a new plan as quickly as possible and to repay bridge financing by the end of November,' said the spokesman in a statement.

Hesse state Premier Roland Koch, one of the biggest advocates of Magna's bid, told rallying workers at Opel headquarters on Thursday that he would fight for the firm.

'We want Opel to continue to exist,' he said, warning GM not to 'maximise profits by taking German workers hostage.'

Several workers said they did not believe the company could preserve its European arm, blaming it for incompetence.



GM: CONFIDENT WE CAN FIND THE MONEY

GM Chief Executive Fritz Henderson told reporters in Detroit he was confident that GM can find the 3 billion euros in financing needed to keep and restructure Opel.

Henderson declined to say how many jobs would have to be cut at Opel or what plants would be closed, saying those details would be presented to Germany and other European governments soon as part of a restructuring plan.

Opel has the liquidity it needs to pay off the 900 million euros ($1.34 billion) remaining on a bridge loan from the German government.

At the same time, GM can find ways to provide financing to Opel from its U.S. operations even after a restructuring funded by U.S. taxpayers that had placed some initial restrictions on the automaker's ability to shift funds to its overseas units.

'We will be very shortly presenting our plan,' Henderson said. 'We feel confident that the plan will be financeable.'

Henderson said GM could provide liquidity to Opel by reducing the royalties that the European unit would otherwise pay to headquarters.

The terms of GM's exit from bankruptcy in the United States after taking $50 billion in U.S. government financing also allow GM to send funding directly to Opel if needed, he said.

'We are able to run a global business. We certainly need to be prudent about it. We need to be careful about it but we can run a global business,' Henderson said.

Henderson acknowledged that the automaker had 'work to do to repair' its relations with the European unions.

In Moscow, Russian Prime Minister Vladimir Putin also lashed out at GM.

'We will have to take into account this style of dealing with partners in the future, though this scornful approach toward partners mainly affects the Europeans, not us,' Putin told a cabinet meeting in Moscow.

'GM did not warn anyone, did not speak to anyone ... despite all the agreements reached and documents signed. Well, I think it is a good lesson.'

One of the concerns for GM about the sale of Opel to Magna had been how to keep intellectual property from spilling over to Russia, a market it expects to contribute to a growing share of sales in coming years.

British Business Secretary Peter Mandelson said GM's decision had created uncertainty. But he also said the decision could benefit European taxpayers, especially in Britain, Germany and Spain, and that workers at GM's Vauxhall unit in Britain would prefer to keep the same management.

Vauxhall employs about 5,500 people.

Countries with GM-owned plants -- Germany, Britain, Spain and Belgium -- were originally expected to provide aid for the rescue of loss-making Opel.

(Writing by Elizabeth Piper; Editing by Andrew Callus, Phil Berlowitz) Keywords: GM OPEL/ ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.