News that the German government will bail out Opel if difficulties at its parent company, GM, means it does run out of funds, are not without controversy.

One German economic institute, the Institut für Wirtschaftsforschung Halle (IWH), has said that the German government should buy Opel.

Head of BMW’s Leipzig plant, Jens Köhler, told the German press agency dpa, that guarantees are not the right way to support a company that has become uncompetitive, and that if the imported financial crisis is the problem then all vehicle manufacturers should receive the same level of support.

According to the Financial Times the German government will attach strict conditions to any guarantees so that any money is invested in Germany. The report said that GM owes billions of euros to Opel – funds that are unlikely to be repaid.

Opel employs around 25,700 people, and a further 50,000 jobs are estimated to be dependent on those jobs. Representatives of the national and state governments are meeting today to discuss what kind of securities Opel might be able to offer for the guarantees. The government is expected decide on the guarantees before Christmas.

See also: GERMANY: Government ready to help Opel