Tags: GM | Opel | Restructuring | loans

GM to Cover Opel Restructuring Costs With Loans

Thursday, 27 May 2010 01:00 PM

General Motors, which is pursuing aid from Germany and other European nations even after posting first-quarter net income of $865 million, reportedly will cover a pledge to increase funding for the reorganization of its loss-making Opel unit with loans and a deposit guarantee.

GM tripled its contribution in March, without saying how it would meet the obligation, after European governments pushed the carmaker to give more than the original 600 million euros in equity it had pledged.

“I’m very skeptical about GM’s request for state aid,” said Joachim Pfeiffer, parliamentary spokesman on economic policies for German Chancellor Angela Merkel’s Christian Democratic Union.

“We need to look at it very carefully, but it’s clear that GM definitely has enough cash to restructure Opel by themselves,” Pfeiffer told Bloomberg.

Germany’s federal government and the four states with Opel plants would evenly split any loan guarantees. Thuringia, where Opel employs about 1,800 staff at the smallest of its four German sites, agreed to provide 27.2 million euros in guarantees.

A panel advising the German government on distributing loans and aid to companies under reorganization began deliberations on GM’s request on May 25.

A final decision on state aid for Opel will be made by the government’s steering committee, which includes representatives from Merkel’s office and the economy, finance and justice ministries.

The Hebrew University of Jerusalem has filed suit against GM for illegal use of Jewish physicist Albert Einstein’s image, United Press International reports.

The Israeli university claims it owns the rights to the image GM used in a magazine advertisement that featured Einstein’s head superimposed on a scantily dressed model.

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General Motors, which is pursuing aid from Germany and other European nations even after posting first-quarter net income of $865 million, reportedly will cover a pledge to increase funding for the reorganization of its loss-making Opel unit with loans and a deposit...
GM,Opel,Restructuring,loans
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2010-00-27
Thursday, 27 May 2010 01:00 PM
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