GM keeps Opel, Nissan eyes profit as recovery picks up

By Michael Shields and Chang-Ran Kim

FRANKFURT/TOKYO (Reuters) - General Motors' move to scrap the sale of its Opel unit and raised forecasts from Nissan Motor Co lifted confidence in the global auto industry's recovery on Wednesday.

But carmakers were in no mood to take chances and continued to try and push costs lower, with Toyota Motor Corp announcing on Wednesday it was quitting Formula One motor racing after failing to win a single race.

A year of turmoil has reshaped the auto industry and those relying on it, but at least one major shake-up will now not go ahead.

After months of negotiations, General Motors abandoned the sale of a majority stake in Opel to a group led by Canada's Magna on Tuesday, saying improving business conditions and the strategic importance of Opel had prompted the decision by its board.

GM Europe said that the plan for Opel included a 30 percent cut in fixed costs but declined to comment on possible job cuts and plant closures.

German union and government officials reacted with anger and frustration after agreeing to jobs concessions and billions of euros in assistance to support the sale plan.

"General Motors' behaviour towards Germany is completely unacceptable," German Economy Minister Rainer Bruederle told reporters.

GM's behaviour showed the "ugly face of turbocapitalism", said Juergen Ruettgers, the premier of North Rhine Westphalia where Opel's Bochum plant lies. Opel labour leader Klaus Franz said the unions would not give in to GM's "blackmail" to help finance its plans and scrapped a deal made on cost savings.