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German economy minister accused of stalling Opel aid

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German economy minister accused of stalling Opel aid


and Wire Reports

Automotive News Europe -- March 25, 2010 11:21 CET

The German government was accused of stalling a decision on aid to General Motors Co.'s Opel/Vauxhall unit for political reasons.

A government committee that reviews requests for loan guarantee requests on Wednesday did not agree on any recommendations for or against granting aid.

Matthias Machnig, economy minister of Thuringia, accused German Economy Minister Rainer Bruederle of stalling a decision for political reasons until after a key state election in May.

The east German state of Thuringia is home to Opel's Eisenach factory which makes the Corsa subcompact.

"Bruederle is playing for time," said Machnig, told the Thüringische Landeszeitung newspaper, claiming the economy minister wants to delay a decision until after a key election in North Rhone-Westphalia.

GM is seeking 1.8 billion euros ($2.4 billion) in loans or loan guarantees from countries with Opel/Vauxhall plants towards the cost of a 3.7 billion euro restructuring to return the money-losing unit to profit in 2012.

So far the UK has pledged 300 million euros. Spain and Poland are still considering GM's request.

GM is seeking about 1 billion euros from Germany where Opel and half of GM's European workforce are based.

The U.S. automaker said earlier this month it would provide 1.9 billion euros in equity and loans to Opel, tripling its funding and cutting its request for state aid in a bid to win over European governments.

Opel plans to cut 8,300 jobs in factories across Europe, shutter a factory in Antwerp, Belgium and reduce production capacity by 20 percent.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100325/ANE/100329938/1308#ixzz0jCcgEtaJ

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