General Motors has withdrawn a request for a handful of European countries to give it financial aid to help restructure its European subsidiary Opel. GM also said that no further layoffs at Opel were on the cards.
GM now says it can rescue Opel on its own
US auto giant General Motors has dropped its request for financial backing from European governments for its carmaker Opel, saying it would restructure its European subsidiary itself. Further layoffs at Opel have also been shelved.
Opel said in a statement that it laid blame for the back flip on the lengthy process of obtaining government loan guarantees from Germany, Britain, Spain, Poland, Austria and Belgium - in which it employs some 48,000 workers altogether.
Britain and Spain had offered loan guarantees, but GM would now do without any government help.
"The validity and reasons for requesting government guarantees have ... not changed but the process has proven to be much more complex and longer than anticipated," the firm said in a statement.
"GM's recently improved financial strength has also been a catalyst for making this decision."
The move comes as a surprise after GM for months insisted it needed European governments to pitch in to restructure Opel.
No more layoffs
Opel said there would be no layoffs or plant closures beyond those already announced at the beginning of this year. Those measures called for Opel to lose 8,300 workers in Europe and close a plant in Belgium.
GM had asked the European governments for 1.8 billion euros ($2.2 billion) in loan guarantees to restructure Opel. Last week, Germany, home to 23,000 Opel employees, categorically ruled out providing its share of the guarantee - estimated at 1.1 billion euros - saying that GM had enough money of its own.
However, the four German states which have Opel plants were looking at whether they could step in and at least partly fill the gap.
Chief executive Nick Reilly has been pushing for a plan to invest 11 billion euros in the company until 2014, updating 80 per cent of the Opel model range.
Author: Darren Mara (AFP/dpa)
Editor: Michael Lawton