Nov. 5 (Bloomberg) -- General Motors Co.’s turnabout on its agreement to sell the money-losing Opel unit bears the stamp of a board restocked with directors from private-equity firms.

TPG Capital LP founder David Bonderman and Stephen Girsky, former president of Centerbridge Industrial Partners LLC, set the move in motion by telling board peers at a Nov. 2 dinner that Magna International Inc. was paying too little, among other issues, said people familiar with the talks. Directors voted a day later to keep Opel, undoing a plan they backed in September.

Bonderman, Girsky and Carlyle Group’s Daniel Akerson injected Wall Street experience into the board after GM posted $88 billion in losses since 2004 and filed for bankruptcy on June 1. With Germany’s Opel staying inside GM, the automaker’s next challenge is making the division profitable.

“In the old days, the board would function like a rubber stamp,” said Joseph Phillippi, president of AutoTrends Consulting in Short Hills, New Jersey. “This board is much more aggressive in terms of questioning assumptions. They’re deal guys, who are much more hard-nosed about the numbers.”

GM directors gathered for an evening meal on Nov. 2 with management expecting a Nov. 3 board vote in Detroit to ratify selling most of Opel to Aurora, Ontario-based Magna and Russian lender OAO Sberbank, said people familiar with the deal.

Saving Opel

Instead, in talks that began at the dinner and lasted into the formal board session, directors determined that Opel could be saved, said the people, who asked not to be identified because the discussions were private.

New Chairman Ed Whitacre, the former chief executive officer of AT&T Inc., initially was neutral, one person said. CEO Fritz Henderson, who sits on the board, made a presentation on Opel without a recommendation on a sale, two people said.

Renee Rashid-Merem, a GM spokeswoman, said she had no comment on the board’s discussions before the decision and said directors weren’t available for interviews. “I won’t comment on what the expectations were going into the board meeting,” she said.

Keeping Opel helps GM protect small-car technology used in models sold around the world while also putting the burden of fixing the unit on the biggest U.S. automaker, instead of sharing the risk with Magna.

“They need to demonstrate they are fundamentally different and take an underperforming unit and turn it into a strong performer,” said Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc. in Richmond Hill, Ontario.

Magna and Moscow-based Sberbank had agreed to put up 500 million euros ($742 million), with 450 million euros in equity and the rest in a convertible loan. GM would have kept a 35 percent stake while getting no direct cash, and Ruesselsheim, Germany-based Opel’s workers would have received 10 percent.

Unanimous Vote

The vote to keep Opel was unanimous, said one person familiar with the decision. The board and management agreed on a plan to run Opel without emergency aid from Germany, which put up 1.5 billion euros, people said.

Also shaping the directors’ choice was their growing grasp of GM’s operations, said another person.

“This board’s view is that we can fix this on our own as we fix the rest of the company,” AutoTrends’ Phillippi said. “Then they end up with a much more valuable asset to sell if they decide to somewhere down the road.”

Hours before the vote was disclosed, Carl-Peter Forster, GM’s CEO of European operations, underscored management’s anticipation of a Magna deal when he said in Berlin the sale should be done in December. Executives later had to rush to brief Magna officials and European governments, the people said.

Beating Projections

Henderson told reporters today that Detroit-based GM is outperforming its post-bankruptcy plan, without giving specifics. Opel also is doing better than projected, GM’s lead negotiator, John Smith, said yesterday on a conference call.

Opel’s European market share rose to 7.9 percent in September from 6.9 percent in January after three straight months of gains.

GM’s new board reviewed the Opel bids in August, at the group’s first meeting, and asked management to study whether keeping the unit might make more sense than selling it.

The sale accord was announced in September after the automaker, Magna and Germany settled disputes over financing and Opel’s access to GM intellectual property. GM had said earlier that a competing bid from Brussels-based investment firm RHJ International SA was “simpler.”

GM will repay the outstanding balance from Germany’s 1.5 billion euro emergency loan by the end of this month, Henderson said today. Smith said yesterday that the total was 900 million euros, while a German member of the Opel trust board, which took over the company as part of the loan terms, said today that 800 million euros are outstanding.

Restructuring Costs

GM expects about 3 billion euros in expenses to restructure Opel and its U.K. twin Vauxhall. Smith said European officials who favored the Magna deal “will also like the GM plan.”

Retaining ownership of Opel marks the second change in GM’s post-bankruptcy plan for unloading unprofitable divisions. GM said Sept. 30 it would wind down the Saturn brand after a sale accord with retailer Penske Automotive Group Inc. fell through.

GM is 61 percent owned by the U.S. government after getting $50 billion in federal aid. The governments of Canada and Ontario have 11.7 percent, a United Auto Workers union trust has 17.5 percent and the old General Motors Corp. has 10 percent.

Besides Bonderman, Girsky, Akerson and Whitacre, the new directors are two former CEOs, Robert D. Krebs of Burlington Northern Santa Fe Corp. and Patricia F. Russo of Alcatel-Lucent SA; and Carol Stephenson, dean of the Richard Ivey School of Business at the University of Western Ontario.

The U.S. Treasury designated Akerson, Bonderman, Krebs and Russo as its appointees, while Stephenson was named by Canada Holdings, the entity managing that country’s GM stake.

The UAW’s choice was Girsky, who is president of New York- based advisory firm S.J. Girsky & Co. and is a former Morgan Stanley equity analyst and a union and automotive adviser. Kent Kresa, Philip A. Laskawy, Kathryn V. Marinello, Erroll B. Davis Jr., E. Neville Isdell were holdovers from old GM board.

To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net; Doron Levin in Southfield, Michigan, at dlevin5@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net

Last Updated: November 5, 2009 13:25 EST