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NINETY EIGHT REGENCY

Germany denies report that gov't finds Opel loan bid 'unqualified'

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Germany denies report that gov't finds Opel loan bid 'unqualified'

February 18, 2010 08:29 CET

UPDATED: Feb. 18 13:50 CET

BERLIN (Reuters) -- A German government advisory panel has not yet decided whether General Motors Co.'s reorganization plan for European arm Opel merits state aid, Deputy Economy Minister Jochen Homann said on Thursday.

He was responding to a report in the Financial Times newspaper that the task force, which groups senior government officials and an investment banker, had deemed the plan "unqualified for government loan guarantees."

"That is not the case," Homann told Reuters, reiterating that Opel would be treated the same as any other company in terms of its request for state aid.

GM is asking European countries with Opel plants to contribute 2.7 billion euros ($3.7 billion) of aid toward the 3.3 billion euro revamp. Germany alone is being asked for 1.5 billion in loans or loan guarantees.

German Economy Minister Rainer Bruederle has publicly expressed skepticism about the plan, but German states with Opel plants have been more open to the idea of using taxpayer funds to help save as many jobs as possible.

The Opel plan envisages 8,300 job cuts -- 4,000 of those in Germany -- a plant closure in Belgium, 20 percent capacity cuts and a return to profit by 2012.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100218/ANE/100219862/1193#ixzz0fu8BbZnk

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