Source: Xinhua
04-01-2009 09:01
Special Report: Global Financial CrisisBERLIN, March 31 (Xinhua) -- German Chancellor Angela Merkel has made a U-turn on saving German carmaker Opel, a subsidiary of General Motors, pledging on Tuesday to giving support to Opel investors and dealers.
Merkel made the pledge when addressing 3,500 Opel workers at the company's Ruesselsheim headquarters on Tuesday.
Merkel said she will form a team of experts to negotiate a new corporate structure for Opel in talks with its troubled U.S. parent group, General Motors.
"We have 60 days in which to talk about how a future concept should look," Merkel said, referring to the two month restructuring deadline U.S. President Barack Obama set for General Motors one day earlier.
She said the German government and authorities from states with major Opel factories would join forces with bankers and Opel managers to "defend German interests" in talks with GM and US officials.
"We must lay the foundation for the creation of a European Opel," Merkel said, adding that she would work to ensure the carmaker was made economically viable by 2012.
Opel managers have said they need some 3.3 billion euros (around 4.38 billion U.S. dollars) to restructure their operations and become independent of General Motors. But the German government has so far refused to provide the funds because it is concerned public money may be transferred across the Atlantic to help plug holes in GM's accounts.
Merkel's Christian Democrats would prefer a private investor to save Opel, while the Social Democrats, her coalition partners and election rivals, want the state to take a stake now to protect Opel's 26,000 jobs.
"We must try to do all we can to find an investor which, on the basis of state support, brings about a long-term solution and believes in Opel," Merkel said. State guarantees are the instrument of choice to help companies during the economic crisis, she said, adding that guarantees apply to Opel suppliers and dealers. She didn't mention taking a stake in Opel.
Earlier on Monday, German Foreign Minister Frank-Walter Steinmeier, the Social Democrat who will challenge Merkel for the chancellorship in September, laid out a 10-point plan saying the German government must take action immediately.
Steinmeier proposed that the federal and state governments, as well as a consortium including Opel dealers and managers, purchase a holding of 50 percent plus one share, leaving GM with the minority stake.
That would give Opel at least three months to reorganize in a bid to find a private investor.
"The first objective must be to save as many jobs and avert as many plant closures as possible in an economically feasible way," Steinmeier wrote in the strategy paper. "The second objective is to sell Opel to a private, long-term investor as quickly as possible."
The cost of an Opel collapse would be "far greater" than a rescue, Steinmeier said, estimating that the price for jobless claims and the fallout of social-insurance contributions would amount to 2.5 billion euros in the first year of failure.
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Editor:Xiong Qu
