Saving Opel Merkel Critical of GM Bailout
A plan to make Opel largely independent of General Motors, and save the German carmaker from failure, will cost at least 3,500 jobs, says the head of GM Europe. The Detroit automaker hopes to free Opel to win financing from a skeptical German government.
German carmarker Opel said Wednesday it expected to slash at least 3,500 jobs as part of its plan to re-establish the General Motors subsidiary as a largely independent operating unit. The layoffs are part of a rescue plan the company has submitted to the German government in the hope of obtaining federal financial aid for ailing Opel.
German carmaker Opel has seen better days. It could face closure if it doesn't get a government bailout and find outside investors.
On Tuesday, though, German Chancellor Angela Merkel said Opel was not a "system-critical" corporation. "There are system-critical financial institutions," she told her conservative party's parliamentary group, according to the Rheinische Post newspaper. "But there are no system-critical industrial firms." It was Merkel's indirect way of saying that Opel is less important to Germany than its crisis-stricken banks. Her statements were intended to counter earlier comments made by the head of the left-leaning Social Democratic Party that Opel was indeed "system relevant." She added, however, that Opel should be given a chance to survive and that like all companies, it has the "right to apply for state aid."
Merkel reportedly also told the meeting Opel must first find a "second investor," although GM could stay on board as a minority shareholder. The chancellor and officials with the parliamentary group of the Christian Democrats and their Bavarian sister party the Christian Social Union, however, are reported to have categorically ruled out the possibility of a German government stake in Opel. Instead, they said they would consider credit guarantees or government loans.
Other members of the government have also been skeptical of the rescue plan set forward by GM Europe on Monday, including Finance Minister Peer Steinbrück of the Social Democrats and Economy Minister Karl-Theodor zu Guttenberg of the conservatives, who said there were still many open questions remaining.
GM says Opel and Saab will go bankrupt without rescue plans. GM's European subsidies of Opel, Saab and Vauxhall together employ about 55,000 people in Europe, including 26,000 workers at four Opel plants in Germany. If dealers and car components suppliers are added to that figure, Forster claimed, as many as 300,000 jobs could be at risk.
In addition to a government bailout, Opel is also looking for a third-party investor -- a task that has so far proven extremely difficult in a time of crisis and overcapacity throughout the entire global automobile industry.
The idea of a private rescue by Daimler AG -- another German company with unhappy experience in a merger with a Detroit carmaker -- was ruled out by Daimler chief executive Dieter Zetsche on Tuesday. "We don't see a role for Daimler in the future development of Opel," he told reporters at the Geneva Auto Show. Daimler extricated itself from a marriage with Chrysler in 2007.
msm -- with wire reports