Germany wants General Motors to increase its contribution to Opel’s reorganisation before considering whether to provide state aid, sources have told Bloomberg News.
The news agency said German economy minister Rainer Bruederle was using a two-day US visit, including a meeting with treasury secretary Timothy Geithner, to express this view.
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GM has said it would provide EUR600m (US$836m) for Opel’s restructuring and was asking for as much as EUR2.7bn ($3.7bn) from European governments.
The German government helped keep Opel afloat last year by providing emergency financing but is now more cautious about providing aid after GM backed out of an agreement to sell the unit to Magna International, the favoured bidder. Berlin expects GM to file a request for state loans by mid-February.
GM said it needed financial support from governments including the UK, Spain and Poland.
Dusseldorf-based auditing firm Warth & Klein has been hired to evaluate Opel’s cost-savings plan and the results of its study will form the basis of GM’s application, according to Bloomberg’s sources.
Bruederle, a deputy leader of the pro-business Free Democrats, took over as economy minister on 28 October, days before GM decided to keep Opel. The Free Democrats opposed excessive government involvement in Opel and the creation of a trust last June to facilitate the sale of the carmaker to an investor. His predecessor, Karl-Theodor zu Guttenberg, had brokered a sale of Opel with German state financing.
As part of its restructuring, Opel plans to halt production this year at its Antwerp factory in Belgium. The closure is part of efforts to restore profit at Opel and its UK sister brand Vauxhall by eliminating 8,300 jobs and cutting capacity by 20%.
In addition to seeking state aid, GM has also asked for EUR265m ($368m) in cost cuts from labour unions. Workers rejected concessions unless GM offered some form of collateral after refusing to extend employees a stake in the company, GM’s European Employee Forum said.
Armin Schild, who represents the IG Metall union on the Opel board, said GM should not be granted state aid because its present plans are “worse than anything that Magna had proposed”.
