Opel said it expects Germany’s Länder (regional states) to comment later today (10 June) on the decision by the country’s economic ministry to turn down a request for loan guarantees.
The decision not to permit Opel access to EUR1.3bn (US$1.6bn) after the automaker had “answered many questions required by many committees” will see the GM division turn to the regions, although it conceded this could still leave it EUR400m short.
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“I understand the German Länder have been very supportive of Opel and it is quite possible we may be able to apply through guarantees from those states,” said Opel CEO Nick Reilly.
“I think they will make some sort of comment [today] along those lines.”
However, Reilly bemoaned the fact it was only now having to go to the Länder for help, hinting had he known which way the federal government was thinking, the regional process could have been instigated earlier.
Opel’s urgency in talking to the regional governments is vital to the company’s restructuring plans which involve a 20% capacity reduction, employee cull and the closure of its Antwerp plant, although it seems the Länder are receptive to Reilly’s overtures.
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By GlobalData“I have heard they will try to speed up the process as much as they can,” he noted, although he conceded even assistance from the regional quarter would still leave a shortfall.
“I have to be honest and say I don’t think the amount would be the same but I hope the door would be open,” he said.
It appears even with such help, Opel could be around EUR400m short of its financial needs although Reilly did not rule out possible intervention from GM.
“I am confident the parent company will see us through these times if necessary,” he added. “There is no threat of bankruptcy – we need some funds but I am sure we will find some from somewhere.”
