GM shifts gears, will keep Opel

General Motors' board of directors has decided that it will keep the Opel business and restructure it, putting an end to plans to sell the European operations to auto supplier Magna International.

GM said it expects the restructuring of Opel to cost $4.42 billion (3 million euros), which it says is lower than the costs associated with outside bids for the company. GM said it will soon present its restructuring plans for Opel to the German government and other governments in Europe.

In a statement, GM CEO Fritz Henderson said: "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, employees, 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."

Henderson also cited improving business conditions in Europe as a factor for keeping Opel.

GM's product plans also rely heavily on platforms developed by Opel. The plans include the current Chevrolet Malibu and the upcoming Chevrolet Cruze, a replacement for the Chevrolet Cobalt.

By Dale Jewett