By Nico Schmidt and Christoph Rauwald DOW JONES NEWSWIRES
GENEVA (AFX) – The Opel’s parent, General Motors (GM) has the bowed to public pressure and now wants something more private money into the rehabilitation of German subsidiary stuck. GM will be on Tuesday, according to Now with a financing package of 1.9 billion euros in restructuring participate in the Adam Opel GmbH. Thus, the U.S. wants to group its Contribution more than tripled, because at first only EUR 600 million should come from Rüsselsheim Detroit to be transferred. These plans were modified from many sources – especially the German federal government — been sharply criticized.
Opel and GM Europe boss Nick Reilly spoke of a "important milestone" and said the funding commitment is "exactly the right measure ‘:" It signals the Determination to put our business back on a sound footing. " The contribution of EUR 1.9 billion would be – mostly in this Year – both in the form of equity as well as loans done. Details about the allocation had not been decided yet.
We appreciate the support very much increased to appreciated, especially when you consider that our parent company high priority on its own liquidity must respect " then the Welshman. The increase in the contribution of rehabilitation was not been an easy decision for GM, since they mainly concerned with Taxpayers’ money had been funded. GM CEO Ed Whitacre said: "This is a commitment to the European business, which for GM of crucial importance. "
Since GM is now ready, more than half of the total Shoulder Opel remediation costs should flow less state aid. Instead of 2.7 Billion of public assistance from the European Countries with Opel locations are according to the company now only Loan and guarantee commitments of less than EUR 2 billion requested. Around 50% to 60% of the requested state aid, according to Opel’s chief Reilly come from Germany.
Thanks to the GM’s commitment to be according to the company for this Year now eliminated all potential liquidity risks. At the British sister brand Opel and Vauxhall were in the second half due to the summer doldrums in the industry Liquidity crunch, approached as has already applied for state aid for August was completely planned.
To restructure the company was originally from an Opel Appropriations totaling EUR 3.3 billion expected. European Governments have, however, the company, to expand the Asked framework for further EUR 415 million to meet critical Be better prepared to market, they said on Tuesday. Opel is before particularly in the western European market is active, the experts expected for this year, a significant decrease.
In mid-February, GM had the long-awaited plan for the future Rüsselsheim daughter presented. After this is over the next five Years, three quarters of the vehicle range of 11 billion EUR renewed will. In parallel, Opel aims to rigorously fix the red pencil. Given Overcapacity in the industry and the weak Market environment in Europe is Opel’s production by about one fifth be reduced, which will cost Europe about 8300 points. Total employ Opel Vauxhall and sister brand still 48,000 people, well half of them at the four German sites.
To meet the short-term financial needs, which in the course of Opel produced restructuring, GM had government support in the European Countries with Opel and Vauxhall sites totaling 2.7 billion EUR sought. Detroit had the £ 600 million by his own admission already helped to clean up, end of 2009 as a part of the emergency loan Germany has been replaced, while the Opel-GM bankruptcy had kept her afloat. This enraged the (German) government, GM’s contribution to a higher calling.
In early November on the proposed sale of GM Opel majority a consortium led by the Austro-Canadian suppliers Magna surprisingly canceled and announced the Remediate Rüsselsheimer tradition Group in-house to try. Thus did the U.S. concern not only the anger of the workers pulled up, but also the German politics. Both parties had to be for Magna future Opel majority Own made strong.
The announcement of an increased private contribution to the Parent company has been estimated by Reilly could now move on to the many fronts to bring gridlock. The first signals from Germany after the GM decision had been positive, said CEO.
While were still no concrete negotiations with the German Federal Government has been led, as the manager. But he was hopeful that Germany would agree to the requested state assistance. Economics Minister Rainer Brüderle reacted cautiously on the other hand, Commitment by GM. "We have in the examination of the application Numerous questions are asked, "said Brüderle in Hanover. Many these questions would have to be answered yet. According to Reilly will this even happened in that week.
Opel’s chief Reilly hopes that today’s announcement by GM in the recently faltering negotiations with workers help on their contribution to business transformation is an agreement find. However, the CEO sees no realistic Alternative to the closure of the plant in Antwerp, Belgium, against the The storm had run workforce. The Opelaner should over wage cut EUR 265 million annually for restructuring . help So far they have refused their consent, however, as GM central Counterclaims does not comply.
Website: www.opel.de - By Nico Schmidt and Christoph Rauwald, Dow Jones Newswires +49 - (0) 69 29725 114, nico.schmidt @ dowjones.com (Hans Seidenstücker in Frankfurt and Patrick McGroarty in Hanover have contributed to this article.) DJG / ncs / has Visit our website http://www.dowjones.de
(END) Dow Jones Newswires
March 02, 2010 07:04 ET (12:04 GMT)
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