EC threatens to blow apart Magna takeover of GM Europe
The much-publicised takeover of GM Europe by Canadian spare part company Magna has attracted the attention of the European Commission only 48 hours after a deal was apparently signed. The talks had been held predominately in Germany, where the vast majority of GM Europe operates from, and there is concern about a £4 billion subsidy which the German government has promised Magna and what exactly the German authorities will get for their money.
Reacting after a complaint from the Belgian authorities it appears that EC is concerned that the German subsidy has in effect guaranteed the future of GM Europe operations in Germany while others in Belgium and the UK are under threat. Despite the fact that Magna has suggested that a 20% reduction in the workforce will be implemented across the board there is a feeling that the German operations may well fare better than most.
When you consider this particular deal has been on the table for some months now although only signed in the last 48 hours the EC has reacted rather quickly with news of an investigation and monitoring situation. If this deal is blown apart by the EC then this would put the future of GM Europe at serious risk and thousands of jobs across Europe under threat.
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