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Germany rejects state guarantees for Opel

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Germany rejects state guarantees for Opel
Photo: DPA
17:51 CEST+02:00
The German government has turned down a request from General Motors for €1.1 billion ($1.3 billion) in state loan guarantees for its Opel unit, Economy Minister Rainer Brüderle said Wednesday.

"I am confident that Opel has a good future without credit guarantees," he told reporters after a government committee was split over whether to provide aid from a government fund set up to help firms hit by the recession.

That left the decision with the economy minister, who has consistently been sceptical of providing state help.

Brüderle said earlier on Wednesday that the once-stricken US auto giant had now found its feet and could apparently cover its own investments without German aid.

"General Motors is in a position to move to modernise itself on the basis of its own strengths," he told ARD public television.

"If I have 10 billion in liquidity in my coffers, if I make nearly a billion in profit in the first quarter, if I have outstanding chances on the stock market, you have to add it up and then you have resources to do something of your own accord."

Brüderle said it was only "normal" that a parent company looks after its unit "and does not just foist off the problems elsewhere."

"That is why the main responsibility is clearly with General Motors, the owner."

Unions immediately slammed Brüderle's decision, with Opel works council chief Klaus Franz calling it "shameful."

"The economy minister is leaving Opel staff standing in the rain, counter to the facts and counter to the interests of the plants in Germany," Franz said.

GM was prepared to pump €1.9 billion into the restructuring plan but wanted €1.8 billion in loan guarantees from European governments including €1.1 billion from Berlin.

But the door to public money may not be definitively closed to the Detroit giant, which emerged from bankruptcy and posted its first quarterly profit in three years in the first three months of 2010.

German Chancellor Angela Merkel on Thursday was set to discuss possible options with the heads of the four German states where Opel has four plants and employs some 23,000 workers, around half the European total.

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