GM Wants $4.2 Billion European Aid For Opel Restructuring

February 27, 2009

Today GM of Europe announced a restructuring plan that would spin Opel off into a separate business unit to save "as many jobs and factories as possible" according to Automotive News. But GM can't do it alone; they claim to need 3.3 billion euros in state aid (approximately $4.18 billion).

This in response to yesterday's protests in Ruesselsheim, Germany where some 15,000 workers at an Opel factory rallied in hopes of saving their jobs. Word of GM's staggering $9.6 billion fourth quarter losses, and the company's subsequent declaration to eliminate some 26,000 European jobs, sparked the protests.

photo credit: Gacelius

photo credit: Gacelius

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"GM could be a majority shareholder in the new business structure with more than 50 percent," said a GM of Europe source, describing a scenario wherein Opel would remain partially linked to its American parent while also taking on outside investors. Those investors would assume more than a quarter stake in the company. U.K. brand Vauxhall would be included in the new entity.

German Chancellor Angela Merkel, who is up for reelection this fall, hopes to minimize job losses and is considering granting aid to Opel but only once she has seen and approved of the plan.

GM has also submitted the plan to the governments of Belgium, Spain and the UK, all countries with Opel/Vauxhall plants. Their response has been varied as they weigh the effects to their economies and workforce against their ability to provide assistance.

[source: Automotive News]

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