General Motors’ Opel division said it would now have to approach regional authorities after today’s (9 June) news the German government had refused to grant it EUR1.3bn (US$1.6bn) in loan guarantees.

The automaker professed itself “naturally very disappointed” at today’s developments that have followed weeks of drawn out negotiations.

The protracted saga culminated in news late this afternoon (BST) from Berlin that the German economics ministry had decided against granting the guarantees.

However, the decision to turn down the request was only made after members of the economic steering committee at the ministry were apparently tied at two apiece, with minister Rainer Bruderle tipping the balance in a casting vote.

The news leaves Opel with relatively few options but CEO Nick Reilly confirmed the automaker would now approach Germany’s devolved lander or regional states for aid, although there would still be a considerable shortfall to plug.

“Depending on what the lander might do it would [still] leave us with something like EUR400m to find somewhere else, but that is what happens,” he said.

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“There are different ways we can deliver this funding – it is more complicated and will take longer. I am certainly intending to work out a plan that allows us to keep the majority of our product investments.”

Reilly conceded nonetheless today’s news could impact on the timeline of some products that could now be delayed, although he declined to elaborate which projects could face a slow-down, preferring to highlight the imminent launch of the Meriva model.

The Opel boss also expressed confidence loan guarantees secured from the UK and Spanish governments would not be affected by their counterpart’s decision in Berlin, although he admitted the new British administration would be reviewing its EUR300m aid package.

“As for the new UK government, we understand they have to make some hard decisions,” he said. “I have been in contact with the [relevant] department and indications are if it is felt to be positive to the British economy, there is no real reason why they should go back on decisions made by the previous government.”

Germany’s powerful unions are bound to react nervously to the decision fearing it could have an impact on factories and jobs, with further details from the labour organisations expected shortly.