Germany ready to aid Opel

February 24, 2009
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, FRANKFURT, Feb 24 – The German government is set to give auto maker Opel credit to survive the global slump and financial distress at Opel\’s US parent, General Motors (GM), a press report said on Tuesday.

The move is prompted by a sense of urgency concerning the situation at Opel, which employs around 25,000 people in Germany, the Financial Times Deutschland said, without identifying its sources.

To date, Berlin has only evoked the possibility of providing loan guarantees to help Opel obtain critical financing as GM goes hat in hand to the US government for aid as well.

Opel supervisory board member Armin Schild has estimated the German car maker needs at least 3.3 billion euros (4.2 billion dollars) in cash to survive.

The company will go bankrupt by May or June if no state aid is forthcoming, mass circulation Bild reported Saturday.

Some politicians would like the government to take a direct stake in Opel, but the idea is subject to debate within Germany\’s broad left-right ruling coalition.

Berlin has told Opel to present a viable business plan if it wants public aid, and that is expected to happen on Friday.

A separation from GM is also under consideration.

General Motors has opened the door to spinning-off Opel as part of a broader restructuring plan which includes laying off 47,000 workers worldwide, slashing production and closing plants.

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