Nov. 4 (Bloomberg) -- General Motors Co.’s U.K. workers said the company’s decision to keep its European Opel unit was “fantastic” and should lead to fewer job cuts at English plants. German employees said the news marked a “black day.”

GM’s jettisoning of a plan to sell a majority stake in Opel and the Vauxhall brand in the U.K. to Magna International Inc. replaces a German-funded savings strategy with one that may spread workforce reductions more evenly across Europe.

“I’m absolutely delighted with this news,” Tony Woodley, general secretary of Unite, Britain’s biggest trade union, said today in a statement. “It’s fantastic news for the U.K. and right that GM does not break up its family and retains ownership of Vauxhall.”

Opel, identified by its lightning-bolt trademark, has about 50,000 employees across Europe. Germany is home to four plants and half of the carmaker’s workforce, while 5,000 people work for Vauxhall. Prior to the Magna agreement, Detroit-based GM had indicated it might close factories at Bochum and Eisenach in Germany, and unions there said today that workers plan to stage protests tomorrow over GM’s change of plan.

U.K. Business Secretary Peter Mandelson said he’d be speaking with GM about its plans for Opel today and that a “sustainable solution” would be supported by the government.

‘Pleasant Surprise’

“For many this is quite a shock, for others -- and I have to say for Vauxhall here in the U.K. -- a pleasant surprise,” Mandelson said in an interview with Bloomberg Television. “ No doubt there’ll be some bargaining, some negotiation if they want help from the British government, but I’m willing to contribute that in a fair and proportionate way.”

The German government called on GM to repay 1.5 billion euros ($2.2 billion) that the country had provided for Opel, with Economy Minister Rainer Bruederle labeling the rethink “entirely unacceptable.” Roland Koch, prime minister of the state of Hesse, where the unit’s Ruesselsheim headquarters is located, said he was “angry,” with “serious concerns” about Opel’s future, and will speak at a rally of workers tomorrow.

“The GM viability plan was better for the U.K. than the Magna plan was, so one would assume that this is a better deal for the U.K.,” Phil Millward, Vauxhall’s human relations director, said in an interview from the brand’s main plant at Ellesmere Port, near Liverpool, England.

GM cited an improving economy and the Opel brand’s strategic importance for the decision to scrap the sale of a 55 percent stake to Magna. Klaus Franz, head of the unit’s German works council, said the U-turn marked a “black day for Opel.”

Magna Cuts

Proposals from Magna, Canada’s largest car-parts maker, and partner OAO Sberbank of Russia would have cut as many as 10,900 jobs in Europe, according to German government estimates.

Unite’s Woodley, who declined to comment on the German strike threat, said he expects GM to stick with its original plan for European factories and that Vauxhall’s plants are the company’s “best and most efficient” in the region after they were restructured several years ago.

“I think it’s good news,” Paul Geary, an assembly worker at GM’s van factory in Luton, near London, said by telephone. “The German government was protecting its own people, and rightly so, but it would have been at a cost to the U.K. And Magna is not a car manufacturer. With GM it’s the old saying -- better the devil you know.”

Belgian Concern

Eddy De Decker, an official at the ACV Metal union in Belgium, where the future of Opel’s Antwerp plant is in doubt, said GM had “lost its credibility” with the Opel decision.

“It’s no secret that Antwerp would close down under GM’s original restructuring plan,” De Decker said by telephone, adding that Belgium had been misled by the U.S. company before over production of the Astra small car and a sport-utility vehicle that he said will eventually move to China.

Unions in Spain, where Opel’s largest single plant in Figueruelas, near Zaragoza, employs 7,000 people, said they’re examining GM’s decision with “extreme caution.”

“We’ll talk today with the rest of European workers to analyze the new situation,” union official and negotiator Chema Salvador said by telephone. “Now we’re back to square one, all must be negotiated from the beginning.”

Spanish Industry Minister Miguel Sebastian said labor levels negotiated with Magna were the minimum acceptable and that any decisions that GM reaches on employment must be dictated by industrial considerations, not political ones.

Sebastian, who spoke in Toledo, said economic terms can be discussed once an industrial model is in place.

Polish Economy Minister Waldemar Pawlak welcomed the GM decision as likely to deliver “significantly better” prospects for Opel’s plant in Gliwice, Agence France-Presse reported, citing comments from the minister.

“We’re taking the news calmly, without wild optimism,” Miroslaw Rzezniczek, deputy head of the Solidarity union’s Gliwice chapter, said by phone. “Without restructuring Opel might not survive, so we’ll continue watching developments.”

To contact the reporters on this story: Steve Rothwell in London at srothwell@bloomberg.net; Beth Mellor in London at bmellor@bloomberg.net

Last Updated: November 4, 2009 12:22 EST