German government set to reject aid for Opel

 German government set to reject aid for Opel
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The government of chancellor Angela Merkel will look for alternative funding for Opel

After more than a year of dithering, the German government is set to refuse a more than €1 billion state aid package for Opel.

According to Bloomberg sources, the government of chancellor Angela Merkel opposes granting Opel the loan guarantees it has requested. A steering committee that decides on aid packages, led by deputy economy minister Bernhard Heitzer, is set to meet in Berlin today and officially reject Opel's bid for state assistance. But, according to the report, the German government will look for alternative sources of funding for Opel, such as from the European Investment Bank.

The money was to come from a German fund set up during the credit crisis of 2008-2009 to help companies affected by the credit crunch. The German government is arguing that GM does not qualify for aid because its problems were due to product failures and not the financial crisis. It also believes that GM now has the cash it needs to restructure Opel.

But the rejection of aid may also be due to the current debt crisis that has hit European governments. The German government is looking to tighten the country's fiscal belt and last week announced an austerity package of €10 billion ($12.2 million) in spending cuts.

GM had been asking for €1.1 billion ($1.3 billion) in loans from both federal and regional governments.

Source: autonews.com (sub req)

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 genie genie
Makes sense, GM is crowing about how they are posting profits now, so time to fund your own restructures. Especially after dicking around the German government, people and Opel workers for nearly a year while GM umm'd and ahh'd about selling Opel. GM had their opportunity and they squandered it. Tough
June 9, 2010 8:22 am
 August Horch August Horch
OK, tough guy. As we all saw last year, it's not as if Opel was busting at the seams with suitors. Realize that while GM has owned Opel for the last 80 years or so, the main beneficiaries of Opel operations have been Europeans, not Americans. GM is expected to spend its profits to size up German Opel, but it was okay for Daimler to basically allow Chrysler to dither. Hypocritical Europhiles.
June 9, 2010 8:40 am
 Kid_Voltron Kid_Voltron
...it's Europeans who've benefitted? In what sense? Opel is GM's baby...GM refused to sell Opel when a buyer was available and now Germany has to foot the bill for that? In the past years GM has failed to grow Opel in favor of it's indigenous brand namely Chevrolet...I live in a country where Opel was neck and neck with VW in terms of sales/popularity...they've totally lost ground and the brand is seemingly being exhaumed from this market (No more Astra/Insignia/Meriva/Zafira and only Corsa is left, the high volume Corsa UTE has been ceased and now literally rebadged into a Chevrolet) ...Magna were ready to take over and finance Opel when they (GM)pulled out saying Opel was too important to let go...it would be suicidal for Germany to finance an apparent rape of it's national symbol by a foreign owner ...GM are using Opel to empower themselves (first it was Saturn and now it's Buick and to some extent Chevrolet in some markets)so it's only right that they themselves resuscitate it ...there's no hypocricy ...Daimler eventually cutted all ties and let go of Chrysler why can't GM do the same especially if there's a buyer? Germany is only looking out for themselves as well...the German government should follow Sweden and only fund Opel if another company is genuinely interested in acquiring it, not while GM are haemorrhaging Opel for the benefit of their American brands!
June 9, 2010 9:47 am
 August Horch August Horch
1. Notice I said "Opel operations." To the best of my knowledge, not one American is employed in the United States by Opel. Shut Opel down and who loses jobs? 2. You forget that one of the problems with the Magna deal was the Russian bank financing that GM was not comfortable. Too bad no other European (or German, for that matter) bank was willing to step up to the plate. 3. Opel is a national symbol? Really. I thought that was VW in Germany. 4. GM used Opel to fill its Saturn line in the latter years. It did not CREATE Saturn to sell Opels. And the Chinese are much more important to what Buick does than Opel. 4. "GERMANY IS ONLY LOOKING OUT FOR THEMSELVES...", so I guess it shouldn't bitch and moan when Germans lose jobs if GM wants to cut back on Opel, right? 5. Dude, where do you think the R&D money that goes into Opel comes from? Germany? NO... it comes from GM, the same GM that my tax dollars were used to save.
June 9, 2010 11:06 am
 August Horch August Horch
Also, the fact of the matter is Germany's just having money problems. Otherwise, why would it even bother looking for other sources to fund Opel's requests?
June 9, 2010 11:03 am
 Kid_Voltron Kid_Voltron
"You forget that one of the problems with the Magna deal was the Russian bank financing that GM was not comfortable" ...you mean prejudice kicked in, the same prejudice that hampered the SAAB deal? Like I said, GM stated that Opel was too good a brand to let go, so why can't they turn it around? is in that the risk they faced when they decided not to sell? Like it or not Opel is a national symbol just as VW/BMW/Mercedes Benz is...there's no need to be cocky about it, it is. Who said anything about GM using Opel to create Saturn or any other company from scratch? empower does not mean create...giving/taking/stealing can empower one...and that's what I mean by GM using Opel to empower it's native brands..."Chinese are much more important to what Buick does than Opel" sure...because those Buicks themselves are Opel...the only reason that is so is because Opel's are not sold in China buddy...they should bitch and moan by all rights...GM refused to sell when it could've...and why should other european nations finance a German company that Germany themselves are reluctant to fund...pure fundamentals. "Also, the fact of the matter is Germany's just having money problems. Otherwise, why would it even bother looking for other sources to fund Opel's requests?" You've just given yourself another reason why Germany rightfully shouldn't help GM. You don't understand politics, helping Opel means helping GM ... "Dude, where do you think the R&D money that goes into Opel comes from? Germany? NO... it comes from GM, the same GM that my tax dollars were used to save." Who said it comes from Germany? and why would I assume it comes from Germany? So in essence you expect Germany to fund development of Buicks? there's nothing Euro-Centric or Anti-American about what people are saying...America has been making cars that are suited best for Americans and no one else in the world...hence the cannibalisation of European brands like Opel/Volvo/SAAB/Jaguar, all of a sudden CTS is the first Global Cadillac, the Cruze is the first Global Chevy and so goes forth ...it's called Globalisation gentlemen...feel it, it is here!
June 10, 2010 3:41 am
 August Horch August Horch
Let's do this again, one by one... 1. With the European banking industry in the s--thole it is in now currently, I do NOT blame GM for having concerns about a deal which would have been underwritten by a bank that would not elaborate on its possible ties to blatantly illegal business characters. And I am a Hindu who grew up in a Jewish town in a Prostestant country, so spare me the racism diatribe. 2. The "empower" vocabulary lesson. Would you then say that Germans employed by Opel are "empowering" themselves with employment and an income. Do you think that perhaps it may be in a government's interest to help keep a segment of its industrial base "empowered." Perhaps this is the reason that the US was willing to bail out Chrysler and GM; and why the Spanish government (Spain, of all countries!) was willing to dump 300 million Euros into Opel... because many people are "empowered" by Opel, a German brand owned by an American conglomerate. And all corporations are trying to "empower" themselves, that doesn't mean that they aren't helping the people they are employing and thusly helping society. And those societies may then have an interest in actually keeping those corporations afloat. To what degree... now that is a REAL political discussion. 3. I understand politics all too well, and I also understand the reality of situations. Part of me wanted not to have to bail out GM (it's never directly done anything for me), but I also understood the real world implications on the US economy of letting GM go down. 4. So Opel is a NATIONAL icon, and therefore Germans have a right to be ticked off about its sputtering but should not be asked to help sustain it. So the virtues of Opel should be claimed by Germans, its failures by its greedy corporate American bosses for the last 80 years. 4. Not all Chinese Buicks are Opels. In fact, not even half of Chinese Buicks are Opels or Opel-based. But more fundamentally; in today's globalized world, Germany has to see that some of its money to support Opel may end up in China before it ends up in Germany. Up until recently the world's-#1-exporter, I hope, is saavy enough to understand this. Just as I understood that some of GMs bailout money ended up at Holden in Australia, Opel in Germany, and Daewoo in South Korea. 5. You are anti-American, either that or really ignorant. Cannibalization of Opel/Volvo/Saab/Jaguar??? Saab and Jaguar, in their entire EXISTENCE, have never made money. Jaguars cars are pretty freakin' cool now, and it all came from the coffers of Ford, not Tata! Trust me when I say most Americans really didn't give a rat's behind about Jaguar's evolution or sustainability. Volvo could have been bought by Peugeot in the early 1990s, and it passed. I wonder why? Ford dumped billions in Volvo (but also mismanaged it). Bottom line, though, is that it failed where others had failed before it. But alas, "America has been making cars that are suited best for Americans and no one else in the world...," right? I implore you, please educate yourself.
June 10, 2010 6:07 am
 Kid_Voltron Kid_Voltron
"And I am a Hindu who grew up in a Jewish town in a Prostestant country, so spare me the racism diatribe. " ... let's leave it there else it'll start to get messy ...
June 11, 2010 2:56 am
 autoficianado autoficianado
I agree with the above comments. I posted the first comment and it was removed due to the fact the Euro-centric WCF readers hate anything American made. Germany was ready and offered to finance much more than 1 billion to fund Opel but only if they could get it out of American control. I say again cut the 20% from the German factories and then watch the German Government come up with the money after the Germans and the states where opel operates factories begin to complain....
June 9, 2010 11:26 am
 Joe_Limon Joe_Limon
GM should shut Opel down or try selling them again. They are losing profit on that venture, which is why GM is asking for the aid in the first place.
June 9, 2010 11:48 am