Opel has been trying to cover itself in case its US parent company General Motors goes bust. GM’s German subsidiary wants government loan guarantees of up to two billion euros from Berlin and from various state governments where it has plants. Opel employs almost 26,000 people in Germany.
After Chancellor Angela Merkel and state premiers met with the carmaker’s bosses and the head of the works council, they said they will decided before Christmas whether to back Opel. But German Finance Minister Michael Glos said they don’t want to open the floodgates: “My fear is that more and more companies with over capacity will seek a rescue plan from the state and that would create problems for.” Glos said Opel is a special case and must be treated as such.Another worry was that if German public money was given to Opel it might end up with the bankrupt parent company back in the US. Norbet Walter, chief economist at Deutsche Bank, said: “The problem with General Motors and Opel is the international factor, which means it’s necessary to make sure that state aid – German taxpayers money – isn’t transferred to a bankrupt GM, which wouldn’t help either Opel workers or European car buyers.” Opel is the first European carmaker to request government financial guarantees. Though not in as bad a state as its US parent, Opel’s sales have dropped 12 percent this year – twice the industry average.