Magna, labor at GM's Opel agree cost cuts

FRANKFURT (Reuters) - Opel's labor force has agreed to contribute 265 million euros ($390 million) in annual savings if General Motors finally sells a majority stake in its European arm to a group led by Canada's Magna.

"The cuts are painful for us all, but we are prepared to assume responsibility," Opel labor leader Klaus Franz said in a statement on Tuesday announcing the accord with Magna after weeks of talks with workers across Europe.

The agreement on behalf of 50,000 Opel staff -- around a fifth of whom are supposed to lose their jobs under the new owners -- moves the sale of Opel a step forward, but GM's board of directors still has to give the final green light this week.

Under pressure to shrink back to profit now that the U.S. carmaker has emerged from bankruptcy, GM's board has already agreed once to sell a 55 percent stake in loss-making Opel to Magna and its Russian partner Sberbank.

But EU competition authorities have asked GM to confirm it would make the same decision knowing that 4.5 billion euros in state aid promised by Germany would go to any buyer of Opel, not just Magna, Berlin's favored bidder.

GM Chief Executive Frederick "Fritz" Henderson has expressed confidence that a sale will go ahead soon, but the new board that oversees GM since its emergence from bankruptcy in July has refused to act as a rubber stamp for management desires.

A source told Reuters last month that there was still a possibility that GM's board could opt out of a sale of Opel in favor of keeping the European carmaker.

PUSH INTO RUSSIA

Magna's deal with labor calls for avoiding plant closures or forced layoffs at Opel, which was ringfenced and propped up with German aid to keep it out of GM's dip into bankruptcy.