Berlin - German Chancellor Angela Merkel stands to lose face over the last-minute decision by General Motors (GM) to scrap the sale of Opel, after having chosen a suitor and secured a multi- billion dollar dowry. Visibly angered, Chancellor Angela Merkel's government immediately called on GM to return a 1.5-billion-euro (2.2-billion-dollar) loan intended to tide over the ailing German carmaker, ahead of its arranged marriage with Canadian car parts supplier Magna.
In total, the German government has pledged 4.5 billion euros in credits and guarantees to sustain Opel under Magna's stewardship - money that Germany has taken off the table now that Magna is out of the picture.
Merkel stands to lose face over what the government is calling a U-turn by GM, after the chancellor had strongly advocated the Magna deal, co-financed by Russian state-owned Sberbank.
Alternatives, including an Opel bankruptcy, would have threatened thousands of German jobs a time when her Christian Democrats (CDU) could not afford to lose votes ahead of September's general election.
Opel employees were quick on Wednesday to insist that the government could not now abandon the car manufacturer's 25,500 German employees to their fate.
"I don't think the government can get out of this agreement. And I don't think it should be allowed to either," said Rainer Einenkel of the workers' council at the Opel factory in Bochum.
The Opel workforce announced strikes, as it became clear that Merkel's government was no longer prepared to protect their jobs at all costs and was reluctant to fund a restructure of Opel under the GM umbrella.
The chancellor will also have to face up to Germany's powerful state premiers, who closed ranks with Opel's staff in the four states where the carmaker is based.
Roland Koch, the premier of Hessen where Opel employs 15,600 at its German headquarters, expressed "shock" and "anger" at Tuesday's decision by the GM board to keep Opel.
It showed "the ugly face of turbo-capitalism," according to Juergen Ruettgers, state premier of North Rhine-Westphalia where Opel accounts for a further 6,000 jobs.
The initial Opel aid package had been assembled under the previous CDU government with the employee-friendly Social Democrats. Merkel now rules in a coalition with the business-oriented Free Democrats, who had always opposed using state funds to prop up industry giants.
GM's about-turn on Opel returns the bargaining parties to their starting positions a year ago - with the exception that the US car giant has been saved from bankruptcy, and Merkel's Christian Democrats were returned to power.
Opel still faces the same problems - and likely factory closures - that troubled the GM subsidiary a year ago. The European carmaker can at least take pride at its freshly avowed value within GM's portfolio.
Opel, which also includes Britain's Vauxhall, produces modern, highly fuel efficient cars that give a strong foothold in European markets and are vital to GM's future in the United States, car industry experts say.
Across Europe reactions were mixed, as the Magna deal had always raised fears that it would protect German production sites at the expense of other Opel plants.
While GM is hardly likely to be more lenient on closing unprofitable sites, workers in Britain expressed relief that, at least, everybody would be equally hit.
GM has signalled that it will meet the November 30 deadline to return its German bridging loan. After that, Merkel must brace herself for another round with the begging bowl, this time to prop up GM's home-grown plans for Opel.
