Opel teeters on the brink
AFP/The Local · 7 Mar 2009, 18:13
Published: 07 Mar 2009 18:13 GMT+01:00
According to the weekly Der Spiegel on Saturday, a plan submitted to government officials last week calls for the closure of factories at Bochum in western Germany, Eisenach in the east and Antwerp in northern Belgium.
The aim is to save some $1.2 billion (€949 million) in staff costs, Der Spiegel said. An alternative proposal would be to cut only 3,500 jobs but lower wages across the board, it added.
General Motors and its German subsidiary Opel are also reportedly readying themselves for bankruptcy, Die Welt reported. The newspaper said the companies have hired high-powered insolvency lawyers in case the German government doesn’t come to the rescue.
Opel has also raised the amount of loan guarantees it wants from the government to €4 billion, the weekly news magazine Focus reported. The company had originally asked for €3.3 billion worth of guarantees to help it restructure and survive Germany's worst recession since World War II.
The companies have hired three law firms, including the Heidelberg insolvency specialist firm Wellensiek, to provide “pre-bankruptcy” advice, Die Welt reported.
The move comes as talks with the German government for loan guarantees to help the storied German brand appear to have stalled over government displeasure with the restructuring plan Opel put forward. The 217-page plan reportedly lacks specifics and instead includes glossy car advertisement photos and sales slogans.
“The Opel leadership has recognised that their restructuring plan can be nothing more than a first proposal,” Dagmar Wöhrl, the State Secretary of the Economy Ministry told Die Welt. The newspaper reported that at least 10 to 12 major questions remain open before the government can come to a decision about whether to rescue the company.