Saturday, November 14, 2009

GM should pay to fix Opel, says German economy minister

It doesn’t appear likely that General Motors Co. will be given state aid by the German government to restructure Opel. Last Wednesday, Economy Minister Rainer Bruederle confirmed that a meeting had taken place with several GM executives who were armed with an apology about their failure to communicate with regards to the decision to back out of selling Opel to Magna International and its partner Sberbank.

The meeting was attended by Nick Reilly, interim head of GM’s European business, and John Smith, GM’s lead restructuring executive for Opel.

The GM executives expressed that it requires 3.3 billion euros ($4.9 billion) for its plans to fix Opel, which has half of its 50,000 employees in Germany.

Bruederle told the GM executives that he expects GM will “basically carry out the financing itself.”

GM executives said they would announce their restructuring plan for Opel soon.