State funding of Opel moved a step closer over the weekend, when Germany's chanceller, Angela Merkel, discussed the issue with US treasury secretary Hank Paulson.
Opel managers, including Carl-Peter Forster, Hans Demant, and employee council chairman Klaus Franz, are scheduled to meet Merkel this afternoon to discuss loan guarantees.
"I think that the federal government will do firstly everything that is necessary to help the company," Merkel's spokesman Ulrich Wilhelm told a government press conference. "But on the other side, naturally maintain a regard of the consequences of how this is handled for other companies."
Opel bosses are concerned that the precarious financial position of its US parent, GM, could threaten their successful European car production company, whose latest model, the Vauxhall Insignia, recently won European Car of the Year 2009.
They have been pressing the German and state governments for loans to cushion the impact of any problems.
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German leaders have said that they are keen to help the car maker, which employs around 25,000 people in Germany, but are determined that any taxpayer funding will not make its way to GM in the US.
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Re: GM meets German government for bail-out
I know what i am about to say would almost never ever happen but:
As far as I can see it Ford and GM Europe have very little to do with their american parents, in terms of technical tie ups etc..
So it wouldnt make much difference if the compaines split and Ford Europe to become its very own comany and one that makes profit along with Opel becoming GM of Euope effectivley and if they would also be profitable as they produce the bread and butter models throught europe!!
Re: GM meets German government for bail-out
Thank you for explaining that. I have quite a good understanding of economics but not a great one of business and I just couldn't get my head around how it would work. But if they do prop up Opel in Europe and GM, hypothetically, goes to the wall, what then? Could they own a big enough stake to claim the whole of European Operations and then run the company based around GM manufacturing equipment, from GM factories with GM designs and design teams? It would be quite extraordinary and, I venture to suggest unprecedented, wouldn't it?
Re: GM meets German government for bail-out
If it's done sensibly, I'm sure a package will be put together, where the German government will purchase shares in the company and end up being a stake holder. It won't mean nationalisation but is should secure enough of an interest in the company for them to be interested.
If not, now would be a great time for the European parliament to do something sensible on behalf of all the countries that rely on Vauxhall / Opel production and supply. Don't suppose that will happen though.