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GM's Nick Reilly warns Vauxhall may not get all the rescue funding needed

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GM's Nick Reilly warns Vauxhall may not get all the rescue funding needed

Opel/Vauxhall may not get all the €3.3bn (£2.9bn) it wants for a rescue refinancing, the car maker's chief executive Nick Reilly has cautioned.

By Graham Ruddick

Published: 6:00AM GMT 27 Jan 2010

Nick Reilly, chief executive of GM's European arm, has warned Vauxhall may not get all its rescue funds.

If General Motors is unable to compile all the funds it requires, then the restructuring of Opel/Vauxhall would need to be more severe then the 9,000 job cuts and 20pc cut in manufacturing that is being planned.

Mr Reilly wants European governments with Opel/Vauxhall plants, including in the UK where 5,000 Vauxhall staff are based, to contribute around €2.7bn in aid, with parent company General Motors pumping in €600m.

However Mr Reilly is cautious because complex negotiations must be conducted with each country and then a deal signed off by the European Commission.

"Maybe we will not get the full €2.7bn, but I do expect we will receive a significant amount," Mr Reilly told reporters in Frankfurt yesterday.

According to sources, the company is expecting challenging talks with Germany, which is expected to contribute the most to the funding package because it employs around half of GM's 55,000 European workers. Angela Merkel, the German chancellor, supported the takeover of Opel/Vauxhall by Magna, the Canadian car parts group, and GM's scrapping of that deal prompted fury in Berlin.

GM's fund-raising efforts have also been complicated by its decision to close a plant in Antwerp, which has ruled Belgium out as a source of support and sparked anger among unions about the restructuring plan.

All the countries with GM plants, including the UK, Germany and Spain, have indicatedthat they are prepared to support the car maker as long as future manufacturing is guaranteed in their country.

Mr Reilly aims to announce the restructuring plan within two weeks, it is understood, when the countries will be officially approached for funds.



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