Opel pleads for $4bn state handout

“More than 26,000 jobs at stake” in Germany as carmaker appeals for funding.

Guttenberg, Germany's economy minister, said 'there are still a lot of unanswered questions' [AFP]
Guttenberg, Germany's economy minister, said 'there are still a lot of unanswered questions' [AFP]

US talks

Guttenberg, who is set to visit Washington in two weeks time, said German authorities would “carefully study the project” and pursue talks, including with the US government.

Opel’s proposal to turn the company around, which was approved on Friday by the company’s supervisory board, also foresees greater autonomy for the German company from its US parent.

A spokesman for the German government said on Monday that a major concern for Berlin was ensuring that German taxpayers’ money did not got towards saving jobs in the US.

Opel is wholly owned by the US group and does not publish separate annual results.

GM has three research and development centres, with one at Opel headquarters in Ruesselsheim, near Frankfurt, that is in charge of  small- and medium-sized vehicles for the entire group.

The centre employs 6,500 people and is deemed to hold more promise for GM’s future than those that work on bigger models which consume more fuel and emit more pollution.

Opel is also a leading force in GM’s research into electric cars, one of which, the Ampera, will be presented this week at the Geneva car show.

Such close integration makes is impossible to completely separate Opel from the US group, management and unions have said.

‘Legal separation’

Albrecht Denninghoff, an analyst at BHF-Bank, a private German bank, said Opel was too small to survive on its own.

Opel was bought by GM in 1929 [AFP]

“There could be a legal separation in order to obtain subsidies, but no more than that,” he said.

If the proposal is to go ahead, authorities will need to come up with a judicial framework over the next few weeks and define the conditions under which Opel could gain its autonomy.

Carl-Peter Forster, the head of GM Europe, said the group “will ask other countries, in which we have significant activities, to contribute” to the rescue package.

Ulrich Wilhelm, a German government spokesman, said that any decision to assist Opel would have to be approved by  European Union competition regulators in Brussels.

“It is our aim to deal with this quickly and properly … what is at stake here is the fate of several thousand people,” Wilhelm  said.

Although Opel has been a German industrial icon since the 19th century, it was bought by GM in 1929.

Opel also operates plants in Belgium, Britain and Spain.

The jobs issue is highly a political one in Germany, with a general election due to be held in September.

Source : News Agencies


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