GM to triple financial boost to Opel
Published on: 02 Mar 2010 09:10 CET
In a statement issued from its headquarters in Rüsselsheim near Frankfurt, Opel said its parent would more than triple the amount it was spending from €600 million to €1.9 billion.
It was therefore planning also to cut the amount of money it would seek from European governments via loan guarantees from €2.7 billion to less than €2 billion.
The announcement came in response to pressure from European countries in which Opel and its sister firm Vauxhall have plants.
The amount needed in total to restructure the company and guarantee its future had previously been put at €3.3 billion – a figure now revised up to €3.7 billion.
"An additional €415 million had been requested by the respective European governments to offset the potential impact of adverse market developments," Opel said in its statement.
Newspaper reports have previously said GM was seeking €1.5 billion from the German government, with the rest coming from the other European countries where Opel have operations.
Less than a month ago, Opel boss Nick Reilly forecast the loss of 8,300 jobs from the struggling carmaker from a total of around 50,000.
But fewer than half the cuts, or 3,911, would take place in Germany, Reilly said.
GM had initially decided to sell Opel but changed its mind after its own rescue by the US government, and has decided to turn the European unit around itself.