Opel seeks US$2.1b state aid
By Christiaan Hetzner and Matthias Sobolewski |
February 10, 2010, Wednesday
|
Print Edition
Print Edition
GENERAL Motors unit Opel has asked Germany for 1.5 billion euros (US$2.05 billion) in state aid to help fund a restructuring plan, including an 11-billion-euro investment and sweeping job cuts, in a drive to break even by next year.
Unveiling details of the car maker's eagerly awaited restructuring plan yesterday, Opel Chief Executive Nick Reilly said the car maker would seek a further 1.2 billion euros in aid from Britain, Spain, Poland and Austria.
Opel and its sister brand Vauxhall will renew four-fifths of its product line even as it shrinks to a profitable size, the company said in a press conference in Frankfurt.
"We now have a road map, we know where we are headed, and we are working with all our partners so we can switch into high gear for a successful future," Reilly told the news conference.
Labor leaders and management have clashed over the project.
Reilly said the restructuring will use up about 1 billion euros of Opel's total 3.3-billion-euro revamp funding needs, as the car maker asks European governments for aid in talks which are expected to take several weeks.
Opel expects state aid to be proportionate to headcount in each country, Reilly said.
German Economy Minister Rainer Bruederle yesterday confirmed that GM has made an application for federal and regional governments to provide 1.5 billion euros in guarantees.
Talks have run aground over GM's notice that Opel's Antwerp plant in Belgium will close, a move one union leader called a "declaration of war" but which GM says is needed to cut overcapacity amid feeble demand that could stay weak for years.
Opel has said it would cut 8,300 jobs in Europe, 4,000 of them in Germany, where most its nearly 50,000 staff are based.
Demanding that Antwerp stay open, labor has frozen talks over giving 265 million euros in annual savings over the next five years.
Officials of European engineering unions plan to meet in Brussels on February 23 to discuss the next steps at Opel.
GM said it is contributing 600 million euros to the revamp financing plan. Reilly has said Opel has enough liquidity to operate "well into the second quarter."
Unveiling details of the car maker's eagerly awaited restructuring plan yesterday, Opel Chief Executive Nick Reilly said the car maker would seek a further 1.2 billion euros in aid from Britain, Spain, Poland and Austria.
Opel and its sister brand Vauxhall will renew four-fifths of its product line even as it shrinks to a profitable size, the company said in a press conference in Frankfurt.
"We now have a road map, we know where we are headed, and we are working with all our partners so we can switch into high gear for a successful future," Reilly told the news conference.
Labor leaders and management have clashed over the project.
Reilly said the restructuring will use up about 1 billion euros of Opel's total 3.3-billion-euro revamp funding needs, as the car maker asks European governments for aid in talks which are expected to take several weeks.
Opel expects state aid to be proportionate to headcount in each country, Reilly said.
German Economy Minister Rainer Bruederle yesterday confirmed that GM has made an application for federal and regional governments to provide 1.5 billion euros in guarantees.
Talks have run aground over GM's notice that Opel's Antwerp plant in Belgium will close, a move one union leader called a "declaration of war" but which GM says is needed to cut overcapacity amid feeble demand that could stay weak for years.
Opel has said it would cut 8,300 jobs in Europe, 4,000 of them in Germany, where most its nearly 50,000 staff are based.
Demanding that Antwerp stay open, labor has frozen talks over giving 265 million euros in annual savings over the next five years.
Officials of European engineering unions plan to meet in Brussels on February 23 to discuss the next steps at Opel.
GM said it is contributing 600 million euros to the revamp financing plan. Reilly has said Opel has enough liquidity to operate "well into the second quarter."
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