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EU to host talks over Opel future next week

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EU to host talks over Opel future next week




NOVEMBER 18, 2009 15:37 CET

MUNICH -- The EU commission has invited General Motors Co. and European economic ministers to meet in Brussels next Monday to discuss the future of Opel factories in Europe.

The EU is keen to avoid a bidding war among European countries with Opel assembly plants looking to preserve local automotive jobs with financial support.

GM Europe interim head Nick Reilly is expected to attend the meeting. Reilly said on Tuesday that GM wanted to reduce its production across Europe by 20 to 25 percent, slightly less than the capacity of three plants, as part of a 3.3 billion euro ($4.9 billion) restructuring plan.

He said GM could cut up to 10,000 of the 50,000 jobs in Europe and hopes to finalize the details within three weeks.

"It could involve closing a plant," Reilly said at a news conference in London. "We haven't 100 percent decided."

Reilly said GM will put up some of its own cash to help fund the restructuring, but hopes to receive money from European governments too.

Opel has cash

Reilly said he was trying to finalize details of how much money European governments may be prepared to contribute to the restructuring.

He said the 3.3 billion euros for the restructuring would be used to finance a short-term shake-up, as well as cover lay off payments and cover investment in the company's product portfolio.

Reilly said Opel has cash reserves of about $2.5 billion, enough to last until "well into the first quarter."

Reilly, a former head of GM's Vauxhall unit, is overseeing Opel temporarily during a search for a new CEO to replace Carl-Peter Forster, the former GM Europe president.

Forster quit earlier this month when GM decided to keep Opel and its UK sister brand Vauxhall instead of selling a majority stake in the division to Magna International Inc. and its Russian partner Sberbank.

A spokesman for EU Industry Commissioner Guenter Verheugen said the meeting on Monday had been called to talk about plans for the European operations.

"The aim is to talk about the future of GM Europe and to "coordinate," the spokesman said.

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