A German union has warned of 400,000 job losses across Europe if Opel is allowed to fail.

IG Metall's Armin Schild told the Berliner Zeitung daily that its demise would have a huge ripple effect on auto parts suppliers and directly hit the 55,600 direct employees in Europe including 26,000 at Opel in Germany alone.

"Everything that would result from a possible Opel insolvency costs more than the help that Opel currently needs," said Schild, according to Agence France-Presse (AFP). He heads the union's Frankfurt unit which covers the main Opel factory at Ruesselsheim.

German chancellor Angela Merkel is mulling Opel management requests for state aid (the tally is EUR300bn spread across the European countries that have GM plants) but risks being accused of acting unfairly towards other firms and jettisoning her free market principles if her government decides to help the company. The British government has been asked for GBP500m to help British unit Vauxhall.

Merke has been quoted in recent days as saying Opel is not 'systemically essential' (unlike banks) but AFP noted that, six months before elections, when Merkel will run for a second term, the untimely end of a German industrial icon dating back to the 19th century would go down badly with voters.