GM's Opel agrees to restructuring plan

[DainBramaged]

German unit will do partial spin off, needs $4.2 billion in government aid

General Motors' German unit Opel today agreed to a restructuring plan that aims to save as many jobs and factories as possible but needs 3.3 billion euros ($4.18 billion) in state aid, GM officials said.

The idea is to split off Opel into a separate unit that would remain linked to its stricken U.S. parent while letting outside investors take a stake of more than a quarter, GM Europe President Carl-Peter Forster told a news conference on Friday.

"There are still no decisions about plant closures or forced layoffs," Forster said.

The Opel supervisory board meeting came a day after thousands of workers protested in Ruesselsheim, calling for an independent Opel after 80 years as a unit of GM. It is the first carmaker in Europe to ask for government support to survive.

Chancellor Angela Merkel, facing an election in September, wants to save as many of the roughly 25,000 German jobs at Opel as possible and the government has said it will consider granting financing guarantees once it has seen the revamp plan.

Aid from across Europe

Opel is looking for state aid from across Europe in the form of credit guarantees or outright loans and wants labor to contribute hundreds of millions of euros in savings in order to bridge a liquidity gap.

Economy Minister Karl-Theodor zu Guttenberg called for "more depth" from Opel before approving aid, saying he could only hope that in the coming weeks he would hear more substance than what had emerged so far from the carmaker.

His comments echo similar dissatisfaction from Stockholm, which criticized GM for basing its request for state aid for Saab on assumptions that were too optimistic.

"All other options have to be exhausted," before Berlin could put taxpayer money at risk, said Guttenberg, adding it must be absolutely clear that German jobs and plants would benefit and not other sites in Europe.

Senior GM Europe labor leader Klaus Franz wants to share job cuts across European plants like Germany's Bochum factory, Antwerp in Belgium and Ellesmere Port in Britain, to save any single site from being closed.

German government spokesman Ulrich Wilhelm said "intense consultations" were needed among countries that were affected.

"National decisions must be prepared and opposing interests have to be dealt with wisely on an EU level," he told a regular news conference in Berlin.

Politicians in the four German states where Opel has plants have been lobbying hard to save jobs.

Opel dealers have signaled a willingness to help secure their livelihoods by taking some form of equity stake in an independent company.

A German newspaper reported that Daimler AG had been in contact with Opel over possibly purchasing the Eisenach plant where Corsas are built, something Daimler later denied.

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