Germany agrees deal with US gov't, GM, Magna

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It's relief for tens of thousands of employees at General Motor's Opel operations after the German government signed a deal with the US government, parent company GM, and Canadian auto-parts maker Magna on Saturday. The pact comes just as GM looks set to file for bankruptcy in a New York court on Monday.

German officials announced Saturday that the government, General Motors and the Canadian auto parts maker Magna International Incorporated had agreed to a plan for Magna to acquire Opel with 1.5 billion Euro in bridge loans from Germany.

Magna will put up 300 million Euros to keep Opel running in the short-term.

The accord was sealed after six hours of talks in the offices of Germany's Chancellor Angela Merkel. It is set to shield Opel and its 50,000 workers in Europe from a GM bankruptcy filing widely expected for Monday.

Angela Merkel told a news conference that it is now possible to create a European company "under the umbrella of Adam Opel".

Angela, Merkel, German Chancellor said "The perspective is based on the fact that we are now able to create a European company, under the umbrella of Adam Opel. We have an investor, with Magna. We have no governmental investment, though the federal government and the states will assist by giving debt guarantees."

Workers at Opel's plant in Ruesselsheim were pleased with the rescue plan. But they also said that many of the details still need to be worked out, and they are adopting a "wait and see" attitude.