German carmaker Opel, a unit of General Motors, has called on Berlin and regional states for credit guarantees to safeguard its financing. The request comes as the financial crisis pounds European carmakers.
Opel faces bleak times as demand for cars falls amid the economic crisis
"The aim of the current discussions is to make preparations for guaranteeing further loans because the global financial situation of our parent company General Motors has worsened," Opel chief executive Hans Demant told the online edition of Handelsblatt.
"We want to ensure Opel's future in Europe but also jobs, which is why we have the full support of our employees," he continued.
Opel and other German carmakers such as Daimler and BMW have announced temporary closures of factories to save costs following a huge drop in orders.
In addition to asking Berlin for help, Opel has also asked that states in which the company has plants to step up to the plate as well. These include North-Rhine Westphalia, Rhineland-Palatinate, Hessen and Thuringia. According to the Handelsblatt, Hessen's government is "clearly ready to provide 500 million euros." ($635 million)
Automakers down and out
Opel hopes Merkel can steer the auto industry out of the current crisis
Hit hard by the economic slowdown, Opel this week wrote to Chancellor Angela Merkel requesting she push harder for a 40-billion-euro loan from the European Investment Bank (EIB) to carmakers.
Opel also requested soft loans to German buyers of new cars and a government buy-in of elderly cars to stimulate the flagging German car market.
Merkel's ruling coalition conceded to scrap the tax on new cars bought in the first half of 2009, but the move has evidently provided little comfort for Opel. The company is also seeking a pan-European plan worth 40 billion euros to provide low-cost loans from the European Investment Bank.
The car manufacturer's struggling parent company, US-based General Motors, has also asked its government for help.