GM Pays Opel 930 Million

GM has decided to hang on to Opel/Vauxhall after initially agreeing to sell it off.

To cover engineering services amid a restructuring of the troubled division General Motors has paid 650 million euros (US$ 930 million) its European unit Opel/Vauxhall to cover engineering services the company said on Jan. 18.

"Specifically, GM is pre-paying the AOG Group (Adam Opel GmbH) for certain engineering services" that would normally come due in April and July, GM said.

GM has decided to hang on to Opel/Vauxhall after initially agreeing to sell it off and needs 3.3 billion euros to finance the division's restructuring.

GM hopes to obtain 2.7 billion euros in aid from European countries where the car makers have operations.

A plan drawn up by Nick Reilly, head of GM Europe and Opel, includes around 8,300 job cuts from a total workforce of nearly 50,000.

In November, GM paid Opel 600 million euros in order to reimburse a German loan that had kept the company on its feet.

Copyright Agence France-Presse, 2010

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