GM Europe Says Opel Needs $4.2 Billion in Aid

Feb. 27, 2009
Issue about potential Opel funds ending up in GM's hands

The head of General Motors Europe, Carl-Peter Forster, acknowledged on Feb, 27 that its Opel division needed 3.3 billion euros (US$4.2 billion) in aid to survive. The figure had already been reported by union representatives.

Opel's activities would be regrouped within an autonomous unit as part of a rescue plan prepared by its management, Forster said. Some Opel plants could be sold to other auto manufacturers, he added, while stressing that Opel itself must remain a part of GM.

Forster spoke after presenting Opel's supervisory board with a plan to save the German car maker, and also said Opel had to find ways to save 1.2 billion euros. The plan was required by German authorities before any public aid would be granted to Opel, which has been hit by a global auto slump and massive financial problems at its U.S. parent company.

Earlier, the Financial Times Deutschland reported that Opel might sell its factory in the central city of Eisenach to compatriot Daimler, maker of Mercedes-Benz autos. GM is in no position to help its German subsidiary, after posting a loss of more than $30 billion in 2008. In fact, GM Europe works committee chief Klaus Franz charges that the U.S .parent undermines Opel's accounts. "Opel is not the disaster, GM is the disaster," he has said.

Franz has also said that Opel was forced to make up losses at the Swedish car maker Saab, another GM unit, and to pay for research and development of GM products designed in Germany but used worldwide.

European sales by the US brand Chevrolet, meanwhile, do not contribute to GM Europe's bottom line, he adds.

Such accusations have increased suspicion on the part of German officials, and the government has refused so far to give Opel any funds, fearing they might go straight into mopping up losses at the parent group.

Copyright Agence France-Presse, 2009

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