Opel withdraws European requests for state aid

Opel withdraws European requests for state aid

Frankfurt: Opel is withdrawing all requests for state aid from governments in Europe, a week after the German government turned it down, leaving parent company General Motors to fund its European arm’s restructuring.

“The decision of the German government last week was disappointing and means that the conclusion of these guarantees is again likely to be months away," Opel said on Wednesday.

The process of obtaining government loan guarantees was too complex and was taking too long in the face of urgent funding needs, which have not changed, Opel said.

The move comes as a surprise after GM for months insisted it needed European governments to pitch in to restructure Opel.

The US carmaker has already agreed to contribute €1.9 billion of US taxpayer funding to keep Opel afloat as the loss-making European brand slashes 20% of its capacity and rejuvenates the bulk of its model range through the end of 2014.

Germany’s economy minister Rainer Bruederle last week rejected Opel’s request for Berlin to backstop €1.1 billion ($1.5 billion) of its borrowing.