Fin24

Germany sceptical on GM aid for Opel

2010-06-09 13:19

Berlin - German Economy Minister Rainer Bruederle underlined on Wednesday his strong reservations about a request from General Motors for big state loan guarantees for its Opel unit.

Bruederle said the once-stricken US auto giant had now found its feet and could apparently cover its own investments without €1.1bn in 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."

Bruederle 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."

A government committee in Germany, home to four Opel plants and half of GM's 50 000 European employees, was expected to deliver a recommendation Wednesday on the automaker's request.

GM is prepared to pump €1.9bn into the restructuring plan but is seeking €1.8bn in loan guarantees from European governments including €1.1bn from Germany.

Recent comments from Bruederle and the conclusions of a sub-committee last week have indicated that Berlin will turn GM down.

Bruederle on Sunday ruled out any "special treatment" for GM, which wants to cut around 8 000 jobs in an effort to turn around the loss-making Opel.

The final decision on GM's request rests with Merkel's government.

 - AFP