Opel is close to benefiting from financial guarantees from three German states in which the company has plants, local press has said.
The German newspaper Sueddeutsche Zeitung said today that the state of Thuringia, in central Germany, will guarantee loans worth EUR27.9m (US$34m) for Opel.
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Meanwhile, another newspaper, Handelsblatt, reported that authorities in North Rhine-Westphalia, western Germany, are looking to give guarantees for EUR100m. A similar decision is expected in Rhineland-Palatinate, Handelsblatt added.
Opel has requested more than EUR1bn in loan guarantees from the federal and state governments.
But at the federal level no decision has been taken yet on the guarantees.
Yesterday, a steering committee of Germany’s rescue funds for Opel met but no definitive decision was taken on aid for the loss-making GM unit. The committee was discussing whether to recommend that taxpayers support loans to Opel worth about EUR1.3bn (US$1.6bn) that would finance some 8,300 upcoming job cuts.
GM is prepared to contribute half of the EUR3.7bn Opel requires in total funding and wants European taxpayers to fund the rest since Opel is a European company. GM’s return from bankruptcy to profitability in just 12 months is expected to undermine the Detroit company’s arguments for support.
A final decision on aid is likely to be made by senior members of the German government, in conjunction with the states affected. As many as 120,000 jobs in Germany alone will be affected by the decision.
