No Help for Schaeffler After Continental Takeover, Merkel Says | Business| Economy and finance news from a German perspective | DW | 02.02.2009
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No Help for Schaeffler After Continental Takeover, Merkel Says

German Chancellor Angela Merkel has ruled out government aid for Schaeffler Group, which is struggling with debt after its takeover of car-parts manufacturer Continental AG.

"We won't foot the bill for risky company decisions," Merkel was quoted as saying in the daily Bild Zeitung.

The paper reported that Schaeffler is seeking 3 to 5 billion euros ($3.8 - $6.3 billion) in new capital to help it with the 22 billion euros of debt it incurred after the merger with Continental.

The Herzogenaurach-based company has rejected criticism that the takeover, finalized last month, had been risky. Schaeffler bought Continental for about 8 billion euros, creating one of the world's largest car parts makers.

But the company's stocks took a tumble after reports began circulating last week that the company was looking for a billion euros in state assistance.

Schaeffler has also announced a reduction in hours for thousands of workers, and argues it is only seeking "interim" assistance in an effort to save more than 220,000 jobs in both companies.

"It's also a matter of ensuring that next-generation technologies remain in Germany in the long run and are further developed here," the company said in a statement.

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