GM to ask Europe for help with Opel

Posted on Friday, November 6th, 2009 at 12:55 PM EST.

General Motors hopes to get European government help to restructure its German-based Opel division, but the company could turn to some of the near-$50 billion in U.S. government money received earlier this year if need be, CEO Fritz Henderson said Thursday, the Detroit Free Press reported.

GM surprised German officials and labor unions this week by backing out of plans to sell Opel to Canadian auto parts supplier Magna International and Russian bank Sberbank, the paper said. The German government had committed 4.5 billion euros ($6.68 billion) to help finance the deal, which would have left GM with a minority stake in the struggling company, the Free Press said.

GM instead, buoyed by better-than-expected progress in its turnaround, wants to keep Opel and restructure the company itself, which will probably include cutting around 10,000 jobs, the paper said. On Thursday, Henderson said GM will seek financial assistance from European governments, such as Germany, to pay for the estimated $4.5-billion restructuring effort, the article noted. In addition, he said Opel will be able to pay for part of its restructuring, the story said. (Detroit Free Press)

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