Gm increases restructuring contribution for opel to 1.9 billion euros
In the restructuring of its subsidiary Opel, the US car company General Motors wants to invest significantly more money from its own resources than previously planned. GM will participate in the restructuring of the group with a cash injection of 1.9 billion euros, Opel announced. The funds are to flow both as equity and in the form of loans. So far, General Motors had only provided a contribution of 600 million euros and relied primarily on state aid.
According to the original restructuring plan, GM wanted the European governments to provide 2.7 billion euros in loan and guarantee commitments for Opel. Now 1.8 billion euros should flow. However, the total costs of the renovation are now estimated at 3.7 billion euros – and are 415 million euros higher than last stated. An Opel spokesman called the difference to the originally estimated 3.3 billion euros a "safety buffer". The money will flow into restructuring, investments and will also serve to secure liquidity.
GM complies with German demands
The General Motors Board of Directors had previously approved the increase in the company’s own share in the Opel renovation. "This is a clear commitment to European business, which is of crucial importance for GM," said GM CEO Ed Whitacre. With this, the company wants to create "trust and confidence in the future of Opel" among the European governments.
Especially from Germany, that originally the majority of the budgeted state aid at 1.5 billion euros should contribute, calls for a significantly higher share of GM in the Opel renovation had become loud. According to the new plans, the US auto company would cover a little more than half of the costs. "Now we hope that this signal will be seen as an important milestone in our efforts to bridge the remaining funding gap with the help of guarantees," said Opel boss Nick Reilly.
The company reported its decision to the EU Commission and the governments involved. He now expects significant progress in negotiations with the European governments over the next two to four weeks. Reilly again asked Germany to make a "significant contribution" to state aid for the renovation of Opel. The plans to save the automaker envisage cutting around 8,300 jobs in Europe, including more than 3,900 in Germany.
Bruderle: "Still many questions unanswered"
Federal Minister of Economics Rainer Bruderle reacted cautiously to the new plans. The increase shows that GM has funds, he said in Hanover. In the context of the application for state aid, however, numerous questions were asked that still had to be answered. The result of the procedure is open.
The Minister-President of Rhineland-Palatinate, Kurt Beck, assessed the planned additional GM investments in Opel as an "important step towards a viable future concept". The Hessian state government also welcomed the GM announcement. With the significant increase in its own share, the Opel parent company had "fulfilled one of the central requirements of the federal states," said State Secretary for Finance Thomas Schafer. The chances for a successful renovation have "increased significantly". Economics Minister Dieter Posch described the GM decision as "a first correct step".