Published: Wednesday, 4 Nov 2009 | 5:59 AM ET

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Keeping Opel is the best strategic option for General Motors given the improved economic conditions, but the automaker needs to appease German politicians' and trade unions anger over its about-face and adapt itself to German ways, European analysts said Wednesday.

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GM's shock decision on Tuesday rendered futile 7 months of negotiations at the end of which Canadian spare parts maker Magna was expected to get hold of Opel. Opel employs 25,000 workers in Germany and more than 5,000 in Britain.

But markets across Europe, especially emerging ones like Russia, are still very important to GM and this is why the company decided to keep its foothold.

"I think when we were really on the brink, 9-12 months ago, in terms of the viability of GM as a business before the US authorities themselves became actively engaged in the support operations…there was an expectation that the only solution was to sell this asset," Chris Tinker, equities analyst at ICAP in London, told CNBC.

"Potentially the Russian market is something that GM is far from wanting to hand over their access to on a plate," Tinker added.

Senior German officials expressed their anger and frustration with GM but said they were not worried about getting back the 1.5 billion euros ($2.20 billion) in bridge financing that must be returned by the end of the month, Reuters reported.

'Totally Unacceptable'

"We will the get the tax payer's money back," German Economy Minister Rainer Bruederle told reporters in Berlin, calling GM's behavior over the future of Opel "totally unacceptable."

The trade union will adopt its classic role as protector of workers' rights and will not give in to "blackmail" to help finance GM, Opel labor leader Klaus Franz said.

Brief "warning strikes" were set to begin, Franz said, quoted by Associated Press.

Industrial union IG Metall said workers at Opel's four German plants would halt work Thursday, followed by similar moves Friday at other Opel locations in Europe, AP reported.

British officials said they hoped GM's plants in the UK, where Opel is known as Vauxhall, will not suffer.

“This is a major U-turn by GM. I assume they know what they're doing by severing the Magna deal, and I hope they have a strong alternative in place," UK Business Secretary Peter Mandelson told CNBC.

"I'm speaking today to (GM president) Fritz Henderson to find out what lies behind this, and make sure that the commitment to Vauxhall remains strong," he added.

Analysts have wondered how GM will finance Opel's operations and what would happen to offers of state aid made over the past months by the German government to save the carmaker.

"The government will underwrite this business," Mandelson told CNBC referring to the UK government's commitment to Vauxhall. "We have to know what we are going to get back. The small print will be very important.”

The EU's competition commissioner Neelie Kroes expects Germany to keep a previous offer of 4.5 billion euros of state money for General Motors to use, since the offer had not been conditional on Magna buying Opel, European officials told CNBC.

For that to happen, though, "the new restructuring plan that GM puts forward should look rather similar to what Magna put out," Christoph Stürmer, director of product development at IHS Global Insight, told "Squawk Box" in London.

GM's failure to come up with a viable plan for restructuring Opel over the past 10 years has had a lot to do with the fact that the US car maker tried American ways to cut costs and American managers telling Germans what to do, which caused culture clashes and misunderstandings, Stürmer explained.

"I think there is a big, big, big communication challenge ahead of them," he said.

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- Carolina Cimenti in Brussels and Ross Westgate in London contributed to this story

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