German government was accused of stalling a decision on aid to Opel

Article by Christian A., on August 26, 2010

The German government is being accused of delaying a decision on whether it will give aid to General Motors Co.'s Opel/Vauxhall unit for political reasons. Matthias Machnig, economy minister of Thuringia, is pointing the finger at German Economy Minister Rainer Bruederle for stalling until after a key state election in North Rhone-Westphalia this May.

Last Wednesday, the government committee that reviews requests for loan guarantee requests did not make any recommendations for granting aid

Opel's Eisenach factory, which makes the Corsa subcompact, is located in the east German state of Thuringia. In an interview with the Thuringische Landeszeitung newspaper, Machnig said that Bruederle is "playing for time."

GM is aiming to receive 1.8 billion euros ($2.4 billion) in loans or loan guarantees from countries that have Opel/Vauxhall plants. This amount will be used towards the cost of a 3.7 billion euro restructuring in an attempt to return to profit by 2012.

To date, the UK has indicated that it will give 300 million euros. Spain and Poland have yet to make a decision regarding GM's request. Since Germany is where Opel and half of GM's European workforce are based, GM wants about 1 billion euros.

Earlier this month, GM said that it will give 1.9 billion euros in equity and loans to Opel. This triples its funding and cuts its request for state aid as it tries to get the support of the European governments. [via autonews - sub. required]

Topics: opel, germany

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