The German Chancellor Angela Merkel is holding crisis talks today with executives of Opel.

“I have invited the head of (Opel) Germany, the head of GM Europe and the union representative so we can discuss on Monday the situation at Opel,” Merkel told a news agency on the sidelines of the Group of 20 summit in Washington. “The federal government, the economy minister and the finance minister are going to take control of this matter,” she reportedly said.

Opel representatives wrote to the Chancellor last week urging her to support a EUR40bn credit package for the European automotive industry, that could be made available by the European Investment Bank. In addition Opel asked for scrapping incentives for old cars, and interest-free credit for the purchase of new cars. But it is also asking for state-backed guarantees for loans specific to Opel.

German Finance Minister Peer Steinbrueck has told the Bild newspaper that there will be no emergency plan for the whole auto industry. He said that the state cannot make up for a lack of purchasing power and cannot be responsible for mistakes made by the industry.

But the government may be prepared to support Opel if jobs are under threat. Opel parent company GM, posted a net loss of US$2.5bn in the third quarter, and will have to act quickly or it could run out of money in a matter of weeks. GM’s European operations have nonetheless been told to shave almost GBP500 million from their costs.

Last week the head of General Motors Europe (GME), Carl-Peter Froster, said that GM would not close any factories on this side of the Atlantic “unless an asteroid hits the earth”. GME posted record a loss of GBP700m before tax during the third quarter.

Opel has 25,700 employees in Germany and plants in four federal states. Merkel will meet with the head of GM Europe and workers representatives on Monday, and on Tuesday the national finance minister and the economics minister will meet with representatives of the states to understand the impact of the threat of bankruptcy at GM on their citizens and what action they might take. Automobilwoche noted that local component suppliers would also be affected, and that around 50,000 component supplier jobs dependent on the Rüsselsheim plant alone.