Jump to content

UK's Mandelson leaves door open for GM aid from Europe British business secretary to GM: Show us a business plan


Recommended Posts

UK's Mandelson leaves door open for GM aid from Europe

British business secretary to GM: Show us a business plan

February 5, 2010 11:46 CET

UPDATED: Feb. 5 14:30 CET

BERLIN (Reuters) -- British Business Secretary Peter Mandelson said on Friday European governments could consider some support for U.S. carmaker General Motors Co.'s European operations if the carmaker presented them with a business plan.

GM's European arm Opel/Vauxhall plans to slash thousands of jobs as part of a restructuring plan and also wants 2.7 billion euros ($3.70 billion) in state aid either as loans or loan guarantees to help finance the 3.3 billion euro revamp.

"The primary responsibility for bringing about the future investment, the use of new technologies and models, the reduction of emissions, rests with the private companies concerned, not with the governments," Mandelson said in Berlin, where he met German Economy Minister Rainer Bruederle.

"If in the case of General Motors, they present a business plan that involves some financial role or underpinning by our governments, then of course we will consider that. But first we have to see the business plan," he told reporters.

A spokesman for Opel said on Friday the business plan would be presented to the governments in the coming days.

Bruederle said the German government has so far not received any business plan from GM.

"If GM submits a proposal, then the government is duty bound to examine it," he said, adding that as agreed with the European Commission, Brussels would also look into the plan beforehand.

Bruederle said last month General Motors could resolve on its own issues related to Opel.

Tough year ahead

In addition to the 600 million euros in fresh equity that GM has already contributed to Opel, GM Europe President Nick Reilly said he has requested 2.7 billion euros in state aid either as loans or loan guarantees.

"Maybe we will not get the full 2.7 billion but I do expect we will receive a significant amount," he said late last month.

All European countries that host major Opel manufacturing sites -- except Belgium -- remain open to extending state funding in principle, Reilly said.

Until long-term financing is secure, Opel has enough liquidity to operate "well into the second quarter," Reilly said. GM's patent unit advanced Opel 650 million euros this month for engineering work first due to be billed later this year.

Opel faces another loss in 2010 as government incentives in its core western European market wind down, taking out some 1.5 million units in industry volume -- roughly 100,000 more than Opel's output when overall demand was strong a few years ago.

As a result, Reilly dismissed labor's accusation that he is cutting into muscle and bone rather than fat, leaving Opel too weak to react to a rebound in demand in the coming years.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100205/ANE/302059936/1193#ixzz0eg33z1yn

Link to comment
Share on other sites

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets


  • Create New...