Opel should not receive state aid, says rival Ford

Article by Christian Andrei, on August 29, 2010

Ford Motor Co. thinks that state aid should not be given to General Motors Co.'s European arm Opel/Vauxhall. Wolfgang Schneider, Ford of Europe's head of legal, governmental environmental affairs said that companies should pay for restructuring themselves. He explained that getting state aid keeps the weak players in the market.

GM aims to receive 1.8 billion euros ($2.4 billion) in state aid from European countries that have Opel/Vauxhall factories in its target to implement a turnaround plan that cuts 8,300 of its 48,000 workforce, reduce capacity by a fifth and return the unit to profit within two years.

Schneider said that government aid to automakers and suppliers had prevented restructuring in Europe's auto industry where there is 30% overcapacity.

In a conference call last Thursday, Schneider said that state aid (in the form of soft loans and cash injections) had not been good for the overall health of the industry or companies such as Ford that restructured early.

Ford has been critical in the aid to Renault and PSA/Peugeot-Citroen, which were each awarded 3 billion euros in low-interest loans from the French government in February 2009 in exchange for a pledge to protect jobs at their factories in France.

Topics: opel, ford, germany

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