General Motors unit Opel has asked Germany for 1.5 billion euros ($2 billion) in state aid to fund some 4,000 job cuts in its home country that would help return Opel to profitability no later than 2012.
Earlier on Tuesday, Opel Chief Executive Nick Reilly submitted a restructuring plan approved by external auditor Warth & Klein that included some 11 billion euros earmarked for investments by 2014.
"We will carefully examine the documents," said Economy Minister Rainer Bruederle, adding Opel has requested another 1.2 billion in aid from Spain, Britain, Austria and Poland.
Chancellor Angela Merkel championed a plan to risk 4.5 billion euros in German taxpayer funds should GM sell a majority stake in Opel to Canadian auto parts supplier Magna (MGa.TO) but talks between Berlin and GM management have been strained ever since Detroit backed out of the deal in November.
A member of the free-market liberals in Germany, Bruederle has repeatedly called on GM to fund Opel's operations itself, and not just contribute 600 million euros.
While the better part of 11 billion euros in planned investments would be funded from Opel's own operations once the company returns to the black, it is not unusual in the auto industry for subsidiaries to finance themselves so long as they can rely on economies of scale from its larger parent.
Nevertheless, trade union IG Metall, which represents most German auto workers, immediately condemned the plan on Tuesday, refusing to contribute wage concessions and recommending German state and federal governments decline the aid request.
Full story
