Steinbrück rejects auto industry rescue plan

Steinbrück rejects auto industry rescue plan
Photo: DPA
German Finance Minister Peer Steinbrück has rejected a financial rescue package for the country’s ailing auto sector on Monday ahead of an emergency meeting about automaker Opel’s dire financial state.

“An emergency economic programme for the entire automobile industry doesn’t make sense,” Steinbrück told daily Bild on Monday. “The state cannot replace private buying power, and also isn’t responsible for the mistakes of the industry.”

Economy Minister Michael Glos also told the paper that saving Opel – which recently asked the German government for a bail out after US parent company General Motors revealed it was close to bankruptcy – would be an exception. “The case of Opel is an exception and should be treated as such,” he told Bild, adding that he feared “more and more companies at over-capacity will seek a state emergency help.”

The German auto industry has been severely wounded by the international financial crisis, with manufacturers rolling back production schedules to make ends meet in recent weeks.

Directors at Opel, which has some 25,000 workers, will meet with Chancellor Angela Merkel on Monday.

Auto industry expert Ferdinand Dudenhöffer warned however, that there would be drastic job losses if the government didn’t help Opel, telling broadcaster Bayern2 that is was an “extraordinary situation.”

Berlin cannot stand by when more than 100,000 jobs could be lost if the company fails, he said, adding that smaller companies that work with Opel and GM would “drive into the wall,” without state help. But Germany should only help Opel if the US agrees to help GM, he said.