Opel’s restructuring deal with its unions looked likely to collapse after Germany’s economics steering committee decided to refuse a EUR1.3m (US$1.6bn) loan guarantee.
Economy minister Rainer Bruederle said on Wednesday (9 June 2010) he had rejected the bid after a steering committee assessing the aid request failed to reach a unanimous position.
Go deeper with GlobalData
He added he was convinced GM had enough money to complete an overhaul of Opel itself.
“I am confident that Opel has a good future without credit guarantees,” he said.
A spokesman for the IG Metall union representing Opel workers said earlier on Wednesday the deal between management and the labour organisations would be threatened should the guarantee not be forthcoming, with potential job losses and plant shuttering.
“The first thing is the agreement between the workers council and Opel management will be withdrawn,” the Frankfurt spokesman told just-auto.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData“The basis of this agreement has always been this loan guarantee will be given. It is a question of cutting jobs and closing factories perhaps. These are the questions that will occur at once.”
Opel’s restructuring plan will involve painful cuts of around 20% in capacity as well as the closure of the automaker’s Belgian plant in Antwerp with the loss of thousands of jobs.
However, Germany’s severe austerity package to slash its economic deficit may well see Opel miss out on its aid package as government ministers eye parent GM’s improving financial position.
That in itself is complicated by widely-held view in the US that American taxpayers should not fund European restructuring given GM’s current dependence on the state.
GM Europe confirmed it was expecting a decision today after the meeting which it expected to last “around two hours” and is expected to comment further once the result is known.
