UPDATE 2-GM Europe chief Forster to leave company -sources

By Christiaan Hetzner and Angelika Gruber FRANKFURT, Nov 6 (Reuters) - The head of General Motors' European business, Carl-Peter Forster, is leaving the company following the surprise decision by GM's board to block the sale of Opel, two sources close to the situation told Reuters. "Forster told a small group of people today that he is leaving," one of the sources said. The son of a German diplomat and former BMW executive was widely expected to run an independent Opel under jilted suitor Magna, and his departure would mark the first high-profile manager exit as a result of the failed deal that triggered a storm of outrage in Germany. "While he may have been someone who avoided conflict in favour of mutual solutions he was an outstanding car expert and vehemently intervened in the development of new models like the Corsa, Insignia and Astra," a company source said, who described the departure as a loss for Opel. Forster spoke out in favour of the Magna deal just days before the board met to approve the sale in mid-September. "Carl-Peter Forster nailed his colours to the mast of Magna," said an Opel labour representative. GM plans to replace him at least temporarily with Nick Reilly, the former plant director at Vauxhall's Ellesmere Port plant in northwest England and current head of GM's international operations. "Nick Reilly is more than capable - someone we've got some respect for since the one thing he did have was integrity. But I don't think he's the sort of person who would make a decision based with any affinity for any one country," the labour representative said, when asked about Reilly's character. Reilly currently heads up the Chevrolet brand, which has long been favoured in Detroit's growth plans at the expense of an Opel strategy designed to keep it within the confines of the European market. Reilly, a Briton, had worked as sales and marketing chief for GM Europe in Zurich before moving to Asia to run GM operations there. He worked for years as an executive at Vauxhall, Opel's British sister brand. TRUSTEE EXPELLED A spokeswoman for GM Europe declined to comment on the report. Opel said Forster was still chairman and an announcement would be made should there be changes. GM left leaders in Berlin and Moscow seething this week when it dropped plans to sell a 55 percent stake in Opel to Magna and its Russian partner Sberbank. GM will instead restructure Opel itself in a 3 billion-euro revamp it wants countries with Opel plants to help finance. The goal is to cut fixed costs at Opel by 30 percent -- in part by chopping a fifth of Opel's 50,000 staff -- but details are scarce. "There are signals from the company that GM will explain its plans next week. The German government is waiting for this explanation and will then evaluate it," German government spokesman Christoph Steegmans said in Berlin. Separately, the economy minister from the state of Thuringia told Reuters that Free Democrat (FDP) politician Dirk Pfeil, a critic of the Magna deal, was being replaced on the trust body that has overseen Opel since GM briefly dipped into bankruptcy. The minister, Matthias Machnig, said the four states with Opel sites had agreed that Pfeil needed to go because he was not representing their interests. Russian Prime Minister Vladimir Putin has suggested the Opel Trust -- not GM -- should have final say on the sale, but the Trust has said it did not need to approve GM's decision. The Trust, which controls a 65 percent stake in Opel, will dissolve once GM repays to Germany the rest of a 1.5 billion euro bridge loan due by the end of the month. (Editing by Greg Mahlich) Keywords: GM/OPEL ([e-mail]; Reuters Messaging: [e-mail]; [phone]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.