OPEL yesterday turned its back on state assistance for its restructuring drive, abandoning months of talks with European governments and leaving parent General Motors to fund the programme.
GM’s European arm said while its cash requirements were unchanged, the process of obtaining state aid was too slow and complex.
“We cannot afford to have uncertain funding plans and new time-consuming complex negotiations at this time when we need to keep investing in new products and technologies,” Opel chief executive Nick Reilly said in a statement.
The move comes as a surprise after GM for months insisted it needed European governments’ help to restructure the loss-making European brand by slashing 20 per cent of capacity and rejuvenating the bulk of the model range through end-2014.
It also comes a week after Germany’s federal government turned down Opel’s request for Berlin to underwrite €1.1bn of its borrowing.
“The decision of the German government...was disappointing and means that the conclusion of these guarantees is again likely to be months away,” added Reilly.
City A.M. Reporter