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Merkel expects 'thank you' as GM repays loans
A thank you this big? Photo: DPA

Merkel expects 'thank you' as GM repays loans

Published on: 24 Nov 2009 12:58 CET

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"I can tell you that the last funds (received by) General Motors have been paid back, which means that the Opel operation has not cost the German taxpayer a cent," Merkel said in a speech in Berlin.

She added that she expected "a comprehensive thank-you letter from General Motors in a few years" and defended her decision to offer the €1.5-billion ($2.2-billion) loan to the Detroit-based car giant, saying: "It was absolutely right ... to build a bridge."

The loan was due to be repaid by November 30.

GM agreed in September to sell a majority stake in Opel, which includes Vauxhall in Britain, to Canadian auto parts maker Magna and Russian state-owned lender Sberbank. But it later pulled a handbrake turn on the deal, deciding instead to keep the loss-making unit and restructure itself, with the loss of around 10,000 jobs across Europe.

It has not yet said where the jobs will be cut and which plants will be closed, leaving GM's 50,000 employees across Europe fearing for their jobs.

The U-turn infuriated Germany and Merkel, who had invested a lot of political capital in the Magna deal.

Germany had offered €4.5 billion worth of state aid for the deal, including the €1.5-billion loan and €3 billion in state loan guarantees.

The news was all the more embarrassing for Merkel as it broke during her recent official visit to the United States.

However, in a boost for Merkel and German Opel employees, GM Europe's interim head Nick Reilly said earlier Tuesday the firm expected to keep open its plant in Bochum in western Germany.

The plant, employing almost 5,200 people near Essen will remain "an important location in the future," Reilly said after talks with the premier of the German state of North Rhine-Westphalia where the site is located.

Reilly was due to hold further talks with regional leaders later Tuesday as he continued a tour around key European countries with Opel factories.

Astra and Zafira cars are assembled at the Bochum plant, which also makes axles and gearboxes, according to Opel. It is one of four Opel plants in Germany, employing between them around 25,000 people.

GM is poised soon to present concrete plans for Opel and is seeking €3.3 billion in financing from European governments.

News magazine Der Spiegel said the company had received offers of €400 million from Britain and between €300 million and €400 million from Spain, as well

as proposed tax breaks from Poland.

Following a meeting of top finance ministry officials and GM executives in Brussels on Monday, the European Commission said that nations affected had decided not to make formal commitments before a further meeting on December 4.

AFP/The Local(news@thelocal.de)

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