Germany is hopeful the UK will provide financial aid for Opel

German Economy Minister Karl-Theodor zu Guttenberg said on Wednesday that the Berlin government was hopeful that Britain was close to giving a commitment on financial aid for Opel.

“We’re still waiting for the respective commitments,” Guttenberg told reporters in Berlin. “However, from what I hear, the situation in Britain on this has got a lot better.”

Klaus Franz, head of Opel’s works council, said German workers’ representatives had helped clear the way for a deal in Britain on the European unit of GM by agreeing that some production should be moved there from Germany.

Canadian supplier Magna International Inc. and its Russian backer, Sberbank, plan to buy 55 percent of Opel and its UK sister brand Vauxhall from GM, but the deal depends on European governments providing financial aid and employees agreeing to job cuts.

To push through a Berlin-brokered rescue for the carmaker, Chancellor Angela Merkel’s government offered to provide 4.5 billion euros ($6.71 billion) in Opel guarantees, saying it would see later how to split it between countries with plants.

These countries include Poland, Belgium, Britain and Spain, which all hope to secure as many jobs as possible in the planned takeover. Roughly half of Opel’s 50,000 jobs are in Germany.

Franz said he was confident the contract to sell Opel would be signed on Thursday. “That is feasible,” he told Reuters.

Magna and Sberbank have vowed to inject 500 million euros into Opel, which they want to use to make an aggressive push into the Russian market.
They plan to cut some 10,500 European jobs, of which about 4,000 are in Germany, but have committed to keeping all the German plants running.

Source: Reuters