German Länder involved in potentially providing Opel with assistance have ruled out direct financial grants, but are mulling loan guarantees.

The GM European division was refused guarantees totalling EUR1.3bn (US$1.6bn) last week by the German Federal Government and has turned to a combination of the four Länder where its main plants are based and the European Investment Bank.

All four state secretaries of the Länder involved - North-Rhine Westphalia, Thuringia, Hesse and Rhineland Palatinate - met yesterday (15 June) in Frankfurt to assess Opel's call for financial assistance following the Federal Government's decision.

A spokesman for the North-Rhine Westphalia government was at pains to stress however to just-auto, that any aid would not take the form of subsidies - which could trigger extra scrutiny from Brussels - but could take the form of guarantees.

"There is no question of actual loans being negotiated - it is provocative with regard to Europe," the spokesman said. "What is on the agenda are guarantees for loans."

It appears there may already be a banking consortium mulling the option of providing Opel with finance - although this has not been confirmed - but it is seeking guarantees from the Länder."

One outcome of the economic ministers' meeting appears to be they need further detail from Opel on its restructuring plan.

"Our position is very clear," said the North-Rhine Westphalia spokesman. "We fight in favour of the plan to improve Opel's situation - together with the other Länder - but first we need an assessment of the situation.

"We need some figures from Opel about the financial means they need. We are still optimistic the Länder will find a way to help with restructuring."

The spokesman added Opel was looking to cut 1,800 jobs at its Bochum plant in the region as part of a Europe-wide restructuring plan to slash capacity by around 20%.

However, the regional government is insisting any such headcount reduction is achieved without compulsory redundancies and is done in a way "socially agreeable to the trade unions."

A spokesman for GM in Germany confirmed the meeting of the Länders' economic ministers yesterday and that although no further schedule of negotiations is available, noted the States were hopeful a solution to Opel could be found.

"Voices from the Länder [were] that they were willing to handle this quickly," he said.