The German government has reacted cautiously on the question of state aid for Opel, which the unit will be asking for in a detailed document due to be submitted today.


The comprehensive document includes a funding request for EUR3.3bn in government support from German and other governments.


German Chancellor Angela Merkel said on Saturday that such aid depended on the firm’s long-term outlook and on the readiness of banks to help.


Merkel has said she could be open to offering financing guarantees, depending on her assessment of the revamp plan.


Merkel is keen to save as many of the roughly 25,000 jobs at Opel’s four German plants as possible and the German media have reported 8,000 to 11,000 jobs are at risk.


Reuters reported that the state premiers of Hesse and North Rhine-Westphalia, which together rely on Opel for about 21,000 jobs plus thousands more at suppliers, said they were ready to help if they could.


The viability plan for GM in Europe which was unveiled on Friday last week calls for a break off of Opel, including the UK’s Vauxhall , into a unit which would be majority owned by its US parent. Outside investors would take a stake of more than a quarter.


Merkel is determined that no state aid could end up flowing back to GM, itself seeking a federal bailout to stay afloat.


Rival carmaker Volkswagen criticised the idea of government aid for Opel.


“The state should stay away from it,” Volkswagen CEO Martin Winterkorn told German weekly Der SPIEGEL . He said it would be legitimate if the state were to give loan guarantees to a company but that should only be a temporary solution.


But Bernhard Mattes, head of Ford’s German operations, said the industry was worried about Opel’s struggle. “We have to keep stability in the industry,” he told Focus weekly.


A source told trade newspaper Automotive News Europe that Opel needs a cash injection immediately to avoid bankruptcy, stressing that financial failure is just weeks away. 


The report also said that securing state financial aid could depend on Opel being established as a separate European legal entity outside of GM, a so-called Societas Europaea (SE).


This pan-European business structure would reassure European governments that their aid would not be spent outside Europe, the report said.