After failing to get government aid, General Motors and Opel/Vauxhall announced today that they have decided to withdraw all applications for government loan guarantees across Europe. The companies said that they will try to meet finding requirements internally.
“The validity and reasons for requesting government guarantees have also not changed, but the process has proven to be much more complex and longer than anticipated and the results are still not finalized or certain,” GM said in a statement. “In these circumstances, and given the need to progress the plan quickly, it has been decided to fund the requirements internally. GM”s recently improved financial strength has also been a catalyst for making this decision.”
“We appreciate the support indicated by certain governments, especially the UK and Spain, but we need to move on,” said Nick Reilly, President of GM Europe and Chairman of the Management Board of Opel/Vauxhall. “The decision of the German government last week was disappointing and means that the conclusion of these guarantees is again likely to be months away. To be clear, our funding needs have not changed and we were led to believe that loan guarantees made available to other European companies under the EU program to help offset the impact of the global economic crisis, would be equally available to Opel/Vauxhall. But, after a very long process defined by governments, this has turned out not to be the case.”
As part of a European-wide request, the UK government had committed guarantees for €330 million of bank loans and a similar amount had been indicated from Spain. The total amount requested from all European governments had been in the order of €1.8 billion.
– By: Omar Rana