Opel Assistance Deal Thin On Details Says German Gov't

March 16, 2009

Yesterday German Economy Minister Karl-Theodor zu Guttenberg, on his way from Germany to the U.S. for talks with GM and U.S. government officials, called upon more information from GM regarding its proposed solution for ailing Opel. He claims that GM's plan for Opel, its German division, is thin on details: "I hope GM and the U.S. government will be ready to shed some light on the issue."

After a huge protest at Opel's Ruesselsheim, Germany factory following dismal fourth-quarter GM earnings results, GM submitted a rescue plan that would spin off a portion of Opel, combine it with U.K. division Vauxhall, and thus create a new subsidiary partially owned by GM. But the deal would require some 3.3 billion euros of German assistance, and that country's Chancellor, Angela Merkel, is reticent to grant any assistance until GM makes a compelling case for Opel's future health. Merkel also claims that German assistance for Opel hinges upon U.S. assistance for GM.

And so Guttenberg heads to the U.S., curious to see if our government will extend yet more help to GM by the March 31 deadline for deciding whether GM and Chrysler "can be commercially viable." GM and Chrysler hope that the U.S. government will decide to grant them an additional $22 billion, claiming that bankruptcy proceedings will only worsen their position and that few buyers will wish to purchase vehicles from bankrupt manufacturers.

[source: Automotive News]

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