Germany has refused to guarantee a EUR1.3bn loan for General Motors European unit Opel whose CEO expressed frustration at the decision.
Economy minister Rainer Bruederle said on Wednesday he had rejected the bid after a steering committee assessing the aid request failed to reach a unanimous position.
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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.
Opel cited examples in the European Union (EU) where such loan guarantees had been approved.
Europe’s vehicle industry had benefited to the tune of some EUR8.5bn last year insisted Opel, referring to aid granted by the European Investment Bank (EIB).
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By GlobalData“Countries in the EU have specific programmes that have been approved to help [those] affected by the global crisis,” said Opel’s Nick Reilly in response to today’s decision.
“[Critics said] support could distort the automotive industry – well just last year alone the European automotive industry received EUR8.5bn from the EIB, which is government sponsored and Opel received none of that.”
The Opel boss also batted back suggestions emanating from Germany that parent company GM’s improved performance should allow it to cover the loan guarantee shortfall.
GM had “enough calls on its finances” he noted and has already committed EUR1.9bn in restructuring and new product aid to Opel.
Reilly hinted at the controversy surrounding any further aid from Opel’s parent, which is still effectively owned by the US taxpayer and the apparent reluctance from American politicians to divert aid overseas.
“Could GM pay for the whole lot,” he said. “In theory it is possible, but they would have to do something less elsewhere in the world.
“They have to very careful about what they spend outside the US in particular.”
The Opel boss conceded nonetheless the manufacturer had been caught in a political backdrop dominated by the economic crisis, which appeared to have scuppered his company’s chances of financial guarantees.
“Chancellor Merkel has been supportive of Opel and I met her recently,” he said. “It was more to do with the general economic situation – we have been caught up in certain economic and political difficulties and I think that has changed the climate quite significantly.”
