GM Europe to go bankrupt within weeks without aid
Wednesday 04 March 2009
Fresh from its ultimatum over the future of its Swedish Saab brand, GM warned yesterday that its entire European operations could run out of money within weeks without state help.
The threat puts 50,000 jobs directly at risk across the Continent, including 3,400 at the two Vauxhall plants in Luton and Ellesmere Port.
Alongside the official unveiling of the Opel Ampera, the European version of GM's battery-powered Chevy Volt, at the Geneva Motor Show in Switzerland yesterday, Fritz Henderson, the beleaguered US car giant's chief operating officer, gave the company a dire prognosis. Insolvency may come as soon as the second quarter of the year, according to Mr Henderson. "We would try to stay alive, but there's no guarantee we could," he said.
GM, which has already had $13.4bn (£9.5bn) in aid from the US government, called for $6bn from European governments last month. In Sweden, following warnings that GM's Saab business would go bankrupt before the end of February without help, the government is helping with plans to spin the marquee out of its parent and, ultimately, float it as a separate company.
In Germany, requests for €3.3bn (£3bn) from bailout funds to prop up the Opel brand – in return for shares in a planned semi-autonomous European operation – have met a lukewarm response. In Spain, GM is slated to receive €200m from the Aragonese government.
In the UK, the Government has refused any requests for company- specific aid – notwithstanding the £6.8m inward investment grant paid to GM to ensure that the new Astra is built at Ellesmere Port.
Given the current parlous state of the industry in general, and GM specifically, the Government is in regular contact with the company. But it is yet to see GM's restructuring plans for Europe, and until it does the company can only access the £2.3bn loan guarantee scheme for low-carbon initiatives available to the industry as a whole. "When the restructuring plan is shared with us, we will be able to sit down with GM to discuss how we can best continue to help Vauxhall," a spokeswoman for the Department for Business said.
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