Opel Restructure Needs 3.3 billion Euros, says General Motors
General Motors will present a plan to European governments to save its struggling Opel business within days. The rescue is estimated to cost 3.3 billion Euros (US$4.9 billion).
GM backtracked on plans to sell Opel this month to a consortium led by Canadian car parts manufacturer Magna. However, it needs government aid to keep Opel running.
Opel interim Chief Executive Nick Reilly travelled to Brussels on Monday to meet with German Deputy Economy Minister Jochen Homann, and Kris Peeters, the premier of Flanders in Belgium.
The meeting was also attended by European Union Competition Commissioner Neelie Kroes, whose blessing is needed before any state can give financial aid.
[Nick Reilly, Opel Interim Chief Executive]:
‚We will inject some GM funds into that requirement too. That is quite difficult because we are also going through a restructuring of our US operations and other parts of the world. “
Following Monday’s meetings, one German politician asked EU countries not to jump in too early.
[Jochen Homann, German State Secretary for Economy]:
„EU rules must be observed, and all countries agreed to commit to the fact that they will make no concessions and will not sign any agreements before the restructuring plan is presented.“
GM says it will present a restructuring plan for Opel to European governments by the end of the week, and that European officials will discuss it and possibly give aid on December 4.
[Kris Peeters, Flanders Premier]:
It’s very, very important that GM knows that Europe will be…will react in a co-ordinated way and not individual.“
Opel has struggled as global demand slumps whilst competition in the overcrowded car market remains cut-throat – the same problems that pushed parent GM into bankruptcy.
GM’s core businesses have been stripped and moved to a holding company.