GM's Opel division asks for German loan backing
Last Updated: Friday, November 14, 2008 | 11:00 AM ET
The Associated Press
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Automaker Adam Opel GmbH, owned by General Motors Corp., said Friday it will seek loan guarantees from German governments as the financial crisis grips European carmakers.
Opel said it would seek guarantees for an unspecified amount from the federal government and the governments of Hesse, Thuringia, Rhineland-Palatinate and North Rhine Westphalia, German states where it has facilities.
Chief executive Hans Demant said the loan guarantees would help secure jobs in Germany and ensure the company's future across Europe.
"The goal is to safeguard Opel's competitiveness even in this difficult global situation," he said.
Finance Ministry spokesman Torsten Albig said the government "will examine the situation carefully next week when all the stakeholders come together."
Demant and Opel employee council chief Klaus Franz, along with GM's European president, Carl-Peter Forster, wrote a letter to Chancellor Angela Merkel on Monday outlining their concerns. The letter called for tax breaks for new cars, which it said would be "socially and ecologically astute."
Kroemer Opel also called for a "line of credit with low rates to buy new, fuel-efficient cars," in addition to a premium to abandon cars more than 10 years old.
General Motors reported last week it lost $2.5 billion US in the third quarter and is burning through so much cash that it could reach the minimum amount required to run the company by the end of this year.
The parent company is lobbying intensively with the U.S. government for part of $25 billion in low-interest loans for the battered auto industry.
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