German chancellor Angela Merkel on Tuesday pledged government support for potential investors in General Motors’ European subsidiary, Opel.
Her promise came in a speech to Opel autoworkers the day after U.S. President Barack Obama warned General Motors and Chrysler that they had limited time to “restructure in a way that would justify an investment of additional taxpayer dollars.” The U.S. government said both companies would receive financial support to keep operating for 60 days — time that would be used to find a viable solution for Opel, Merkel said. Opel employs about 25,000 people in Germany and has said it needs €3.3 billion ($4.4 billion) in state aid from European governments to save jobs and keep plants open, Reuters.com reported. GM Europe has said it will need an outside investor to push through its proposed rescue plan but so far there have been no serious public declarations of interest in Opel. “We will make use of those 60 days” to “quickly lay the foundation for creating a European Opel,” Merkel was quoted by Bloomberg.com as telling workers at Opel’s headquarters in Ruesselsheim, southern Germany.
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She added: “We have to work hard, we are going to create a ‘negotiation team’ with the participation of the German government, Opel and specialist and that team has to work out with GM and American government a new strategy for Opel.” She added that any new investor “will of course have state support.”
However, Merkel’s coalition, facing a national election in September, is split over ways to save the 110-year-old German carmaker that has been part of GM since 1929, Bloomberg.com reported. A decision on whether to take a stake in Opel has been pushed further back following the U.S. government’s less than enthusiastic response to GM’s plan to return to profit.
