Opel/Vauxhall has blamed continuing delays in loan guarantee applications for its abrupt decision to terminate all requests for European State assistance today (16 June) and turn to the US parent for help.
Those requests fell on on deaf ears in Berlin but had been approved by the UK and Spain, while discussions between Opel and the German Länder as well as the European Investment Bank were ongoing.
However, all such guarantee requests have suddenly been withdrawn following Opel parent GM’s decision to provide its European division with either EUR1.6bn (US$2bn) or EUR1.8bn on top of the EUR1.9bn it had already earmarked.
Opel CEO Nick Reilly nonetheless denied GM had lost credibility by suddenly deciding to provide all the cash the automaker required for its restructuring and investment programme.
“We are pleased we have a high priority our parent company has given us,” he said. “I don’t believe GM has lost any credibility – that is for others to judge.
“Remember these [loan] applications were put in more than six months ago and follow the desires of the governments involved. They wanted us to follow a similar path to Magna as they were familiar with that.”
Reilly insisted there was “nothing abnormal” about the loan guarantee requests but conceded they had been caught in the maelstrom of political and economic events currently swirling around Europe.
The Opel chief also admitted GM had not expected to come up with the extra money itself as it been given “strong indications all along” it would receive a favourable loan guarantee result.
And Reilly batted away suggestions the German government had called GM’s bluff, maintaining Opel had followed European Union rules and government requests in line with financial assistance given to many other companies.
He added Opel could not delay its restructuring plans any further – its decision to close the Antwerp site had already impacted on extra financial implications for 2011 for example – but had to act swiftly.
“We had no idea it would take this long, but GM’s financial position has improved somewhat, the outlook is positive, so it [GM assistance] was deemed the right thing to do,” he said.