General Motors working on Opel spin-off

After some 15,000 thousand workers rallied outside Opel’s Ruesselsheim headquarters, GM said it has decided to spin off its German unit and needs 3.3 billion euros ($4.2 billion) in state aid to avoid major job cuts.

Carl-Peter Forester, GM Europe President, said that a spin off mean that Opel would remain linked to General Motors while outside investors take more than a quarter of the company. According to sources, the spin off could range from 25 percent to 50 percent of the company. Opel’s UK brand Vauxhall will remain a part of the spin-off company.

Forester said that Opel is seeking 3.3 billion in aid from European governments to avoid bankruptcy. He said that the loan “will be paid back at the latest by 2014-2015.”

Source: Reuters