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GM returns to Cold War fear in talks to sell Opel

GM announced the tentative deal with Magna in May at a time when it was desperately trying to avoid bankruptcy protection.

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A flag of GM (General Motors) is seen next to an Opel logo at the Opel plant in Bochum August 25, 2009. German Foreign Minister Frank-Walter Steinmeier said General Motors Co's top negotiator for a deal on the sale of its European unit Opel would meet the government's Opel Taskforce on Tuesday in Berlin.

Ina Fassbender/REUTERS

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Behind GM’s hesitation to sell its unprofitable car business in Europe lies a Cold War fear: American technology will fall into Russian hands.

It’s among the main reasons why General Motors Co. has balked at finishing a deal to sell its Opel unit to a group led by Canadian auto parts maker Magna International Inc. and Russia’s state-owned Sberbank.

GM announced the tentative deal with Magna in May at a time when it was desperately trying to avoid bankruptcy protection.

But now, after exiting bankruptcy in better financial shape and encouraged by signs of better sales, the Detroit-based automaker is second-guessing the deal, worried that future auto designs could wind up with Russian rival GAZ, which competes with GM’s Chevrolet, the No. 2 brand in a growing Russian market.

GM is pushing a competing bid from Brussels-based investor RHJ International SA and may even keep Opel if its worries can’t be resolved. It’s playing hard ball, even though the German government, eager to preserve many of Russelsheim-based Opel’s 25,000 German jobs in an election year, has offered 4.5 billion euros ($6.5 billion) in credit for the Magna-Sberbank deal.

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