Report: Germany has yet to decide on Opel aid

Opel

Germany has yet to put forth a final decision on aid to Opel, leaving thousands of jobs at the GM unit unstable at best. Opel, which has been losing money for quite some time, seeks aid from Germany so that it may better compete in the tough European auto market, but GM”s recent rallying performance has made it difficult for the company to get the German Aid they need. GM, however, only wants to contribute half of the needed 3.7 billion Euros, saying that Opel is a European company for European taxpayers to worry about.

Three of the four German states that house Opel plants are ready to grant guarantees, raising pressure on the national government to do so.

GM came under much heat last year as it scrapped its plan to sell the unit, and instead asked the European workers and governments to contribute to the cost of a return to profitability.

Germany is apprehensive about funneling taxpayer funds into the company, although it is the home country to half of the 48,000 employees of the company, because of GM having reneged on a sale of the unit to Canadian supplier, Magna International, which the government set up.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)