German government delayed a vote expected to rule out Opel state aid

Article by Christian A., on August 27, 2010

Instead of meeting last Friday, the German rescue fund's four-person steering committee is expected to meet on June 7 to discuss whether to approve General Motors Co.'s request for 1.1 billion euros ($1.3 billion) in federal and regional assistance for its European unit Opel, according to a Bloomberg report that cited two sources.

The steering committee includes Chancellor Angela Merkel's chief economic advisor Jens Weidmann and is led by Deputy Economy Minister Bernhard Heitzer.

The postponement of this meeting further lengthens the time (18 months so far) of GM's wait to get the required funding.

GM initially asked help from German state and federal governments in November 2008. There had been signs that the final decision, which was expected by the end of May, would be against extending aid, raising fears in the work force.

To coincide with the meeting, a demonstration is being planned by Opel's labor leaders with German union leader Berthold Huber to be made in front of the Frankfurt stock exchange to pressure Berlin to guarantee 90% of a 1.3 billion euro loan the carmaker applied for.

GM asserted that supporting its loan would only serve to partially help to restore an even playing field to the European auto industry.

GM revealed that other rivals were able to borrow billions from the European Investment Bank last year. But because GM lacks a credit rating, it is unable to do the same. [via autonews - sub. required]

Topics: opel, germany

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