"A milestone," says Opel CEO Carl-Peter Forster (head lowered) of the sale of a controlling stake in the company to a consortium lead by parts supplier Magna. But there's growing opposition to the deal.

The newly-reconstituted Opel is getting off to a shaky start, even before General Motors and its new partners have completed their deal to share control of the struggling German automaker.

The deal will go through, said senior officials from both GM and Magna International, the Canadian supplier that led the acquisition of a majority stake in Opel.  But trouble could be facing the new partners on several fronts. 

For one thing, European Union officials may challenge the deal, which was completed under heavy pressure from the German government, and even Opel’s labor unions, which will receive a 10% stake in the former GM subsidiary, are warning of a possible “action” to pressure Opel not to close plants or trim it’s workforce.

Facing the threat of bankruptcy in Europe, GM announced, earlier this year, that it would sell a stake in Opel, in return for a German government bailout. Negotiations dragged on until last week, as it became clear that the U.S. maker was looking for an alternative bidder who might eventually allow GM to regain control of Opel. But last week, GM gave into pressure from Berlin, agreeing to sell a controlling stake in it’s troubled European operations to Magna and it’s Russian backer, Sberbank.

Opel brought this new logo to Frankfurt, along with a new slogan: "Wir Leben Autos," or "We Love Cars."

“This is certainly a milestone,” proclaimed Opel CEO Carl-Peter Forster, during his opening remarks at the 2009 Frankfurt Motor Show.  But Forster acknowledged there are “critical voices” questioning the sale.

Those critics contend the deal was motivated by politics — with national German elections just weeks away, Chancellor Angela Merkel personally intervened, hoping to convince GM to complete the sale as soon as possible.

That has provoked an angry reaction from other parts of Europe, including Belgium, where the foreign affairs minister is suggesting the Merkel government was hoping to protect its own Opel factories, which could lead the automaker to close plants in other parts of Europe.

That could lead the European Commission, the executive arm of the European Union, to step in.  If it found the deal violated EU regulations, it could force changes or even block the deal entirely.

But the EU isn’t the only potential stumbling block.  Klaus Franz, Opel’s German labor chief, warned that “We stand in solidarity” with Belgian workers, and warned that there could be an unspecified “action,” which could well be read to mean a strike, if Opel does cut jobs.

“It might be possible” to protect workers, said Forster, in an interview with TheDetroitBureau.com, quickly adding that this is “not likely.”

Indeed, Siegfried Wolff,  CEO of Magna’s European operations warned that as many as 10,000 jobs could be lost – twice as many as Opel had originally forecast when it went looking for financial help, earlier this year.

Despite the numerous threats to the Opel acquisition, Magna’s Wolff told TheDetroitBureau.com that, “No, I am not concerned,” the deal will be scuttled.

For his part, Opel’s Forster agreed, later telling TheDetroitBureau that, “I think the EC will find that any final decisions (during the negotiations of the sale) were based on facts, and not politics.”

Barring any move by European regulators, Magan’s Wolff said he expects to see a formal contract signed “in the next couple days,” and the transfer of assets completed “in eight weeks.”

What happens then is anything but certain.  Skeptics fear that the new relationship between GM and Opel will complicate their relationship, which dates back to before the Second World War.

In recent years, GM has been moving to a global product development strategy, with Opel taking a lead in designing and engineering many of its mid-range passenger cars and crossovers, including the Chevrolet Malibu and Saturn Vue.  By sharing components and platforms, the
automaker has been driving down costs and speeding up time to market.

With outsiders now in control, however, GM may pull back, perhaps turning to product development centers in South Korea or the U.S. Some analysts speculate.

“I don’t see the incentive,” countered Forster.  Opel will retain it’s “high-tech skills” in compact and
Midsize vehicle development, the Opel chairman contended, which give it an advantage that GM would find difficult to walk away from.

Nonetheless, Forster admitted that decisions could be driven by uncertainty, conceding that “it will take several years to figure out” how things work under the new ownership structure.

There also are concerns about what Magna’s Russian partner might have in mind, especially since it was looking to become a player in the former Sobiet Union heartland’s auto market even
Before  put Opel up for sale.

Magna’s Wolff sent a decidedly mixed message during his conversation with TheDetroitBureau.  At one point, he said the new owners would not compete with GM in markets such as Russia with Opel products.  But he also hinted that the German maker is under “no restrictions” that might prevent it from entering markets like Australia, where another GM subsidiary, Holden, is a key player.

“There is a certain kind of (new) freedom for Opel and this is fantastic,” Wolff emphasized.

How much freedom Magna and GM’s new partners exercise, in the future, could become a critical issue as the two sides move ahead to complete the deal announced last week.Opel Deal Won’t Be Derailed, Say Partners, But Criticism Mounting