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No state aid to save Opel plants, EU says

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No state aid to save Opel plants, EU says

Staff report February 8, 2010 10:00 CET

MUNICH -- The European Union will only authorize aid for Opel if the company presents a credible rescue plan, said EU Competition Commissioner Neelie Kroes.

The comissioner said EU nations cannot offer Opel parent company General Motors Co. help just to protect plants in their own countries from closure.

“For us locations play no role. The important thing for us is whether General Motors can prove that the European subsidiary can survive in the medium term without state help,” Kroes told German business daily Handelsblatt.

She also linked the possible state funds to investments by GM in environmentally friendly innovations.

“Generally aid is only available when it is used to develop innovative, environmentally friendly products,” she told the paper in an interview.

GM is seeking €2.7 billion ($3.7 billion) in state aid for its European operations.

Opel plans 8,300 job cuts from its 48,000 workforce to reduce capacity by a fifth to counter feeble demand. It has said 4,000 of those cuts would be in Germany.

Kroes will leave his office this week replaced by Joaquín Almunia, the Spanish Commissioner currently in charge of economic and monetary affairs. Kroes, who has been Competition Commissioner since 2004, will move to a less powerful position in charge of Europe's “digital agenda.”

Read more: http://www.autonews.com/article/20100208/ANE/100209886/1308#ixzz0exYsXr4J

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