Magna, labour at Opel agree cost cuts

Closing the Opel transaction awaits crucial details on financing, including nailing down details of aid sought from states with Opel plants such as Britain, Spain and Belgium.

The European Commission is keeping a close eye on the deal to ensure state aid is not misused for political purposes.

Magna's group has vowed to inject 500 million euros into Opel and use it for an aggressive push into the Russian market.

Sealing the deal would be a coup for Magna founder and Chairman Frank Stronach, who left his native Austria at age 21 as an impoverished toolmaker but went on to build one of the world's biggest car parts group.

It would also mark a milestone in the dismantling of GM, the 101-year-old U.S. company that was unseated last year as the world's largest automaker by Toyota <7203.T>.

Opel, founded in 1863 and which GM bought in 1929, is the backbone of General Motors' European business.

Opel and British sister brand Vauxhall saw sales in Europe fall 11.4 percent in the first three quarters of 2009 to around 828,000 units, reducing its market share to 7.6 percent from 8.0 percent a year earlier. At that rate its 2009 sales could reach around 1.1 million units.

Opel's big products are the Astra compact and Corsa small car, both of which sold over 400,000 units in 2008.

GM relaunched out of bankruptcy with $50 billion in funding from the U.S. government, which now owns about 60 percent of carmaker.

(Reporting by Michael Shields; editing by David Cowell)