Talks on a rescue plan for Opel, the German subsidiary of ailing US carmaker General Motors, ended with many questions left unanswered.
GM subsidiary Opel's fate is still in the balance
The talks on Friday, March 6, at Chancellor Angela Merkel's office were called to discuss state aid for the GM offshoot, which reportedly needs 7 billion euros ($8.87 billion) to stay afloat.
After the meeting among General Motors Corp, its German subsidiary Adam Opel and government officials, the companies were asked to provide more information on a number of questions regarding Opel's business and plans to make the unit viable.
"We had an open, good and constructive conversation with the General Motors management," said Economic Minister Karl-Theodor zu Guttenberg after the hour-long meeting. "But there were many issues that still need to be cleared up."
GM Europe President and Opel Supervisory Board Chief, Carl-Peter Forster, meanwhile stressed that GM and Opel would do everything to get the government the information they requested regarding restructuring plans at Opel.
Nonetheless, the German government will not decide for several weeks about possible state aid for the troubled car maker, a spokesman said.
"Talks will last several more weeks," said Ulrich Wilhelm. "Both sides note that there are still a lot of unanswered questions."
Also taking part in Friday's meeting along with zu Guttenberg and Forster were Chancellery Chief of Staff Thomas de Maiziere, top finance ministry official Joerg Asmussen, GM Chief Operating Officer Fritz Henderson and Opel chief executive Hans Demant.
Many Opel employees are hoping for survival by leaving GM
Chancellor Angela Merkel called the meeting in the capital to discuss a possible government rescue. Merkel has been unhappy with the slow pace of the rescue efforts.
The meeting came after government politicians reiterated their support for Opel.
But German Finance Minster Peer Steinbrueck, as well as other politicians, said details in the rescue plan presented this week by Opel insufficient to warrant receiving a federal bail out.
Guttenberg agreed that Opel would have to present a plan ensuring its future before the government would provide it with funding.
"We need a company that is going to survive in the market not just for four or five months, but one that has long-term perspective," he said, adding that he would travel to the United States in mid-March to conduct talks with GM leaders as well as US government.
Steinmeier: Opel task force
Foreign Minister Frank-Walter Steinmeier, who is running for the Social Democratic Party against Merkel for the chancellorship in September, suggested federal and state government officials as well business leaders form a task force to determine ways to ensure Opel's survival, according to a report in Friday's Handelsblatt.
One possibility floated by Hesse state Premier Roland Koch was to fund an Opel-Vauxhall company based in Germany and independent of GM with up to 5 billion euros ($6.27 billion), Koch wrote in a Handelsblatt op-ed.
The government can't afford to throw a line to every struggling company, experts said
Experts, however, warned of providing government funds to struggling companies. The Munich-based Ifo Institute said Opel was the tip of the bail-out iceberg and that the government would not be able to rescue every company that requests aid.
"The state cannot comply with every request because it does not have enough money to," the institute said.
GM has requested a total of 3.3 billion euros from the European countries where it has factories and said it would be forced to lay off thousands of European employees regardless of whether it receives the money.
A German parliamentary committee has also said it plans to address the auto crisis by inviting Forster as well as the head of the IG Metall trade union to testify at its next meeting, according to the economics committee spokeswoman Ulla Loetzer.