GM says it will more than triple Opel investment
FRANKFURT: US automaker General Motors said Tuesday it would more than triple the amount of funds needed to rescue its ailing European division Opel/Vauxhall, providing more than half the total in response to calls from European governments.
GM said in a statement that it would provide 1.9 billion euros (2.6 billion dollars) "as part of its commitment to the European viability plan," more than three times an initial offer of 600 million euros.
Opel/Vauxhall chief executive Nick Reilly said the funds would be made in the form of both equity and loans.
The group had estimated Opel/Vauxhall would need 3.3 billion euros to get back on its feet, but European governments called for an additional 415 million "to offset the potential impact of adverse market developments," the statement said.
Governments would now be asked to provide less than two billion euros in loan guarantees, compared with 2.7 billion initially, it added.
GM had decided at first to sell Opel/Vauxhall but changed its mind after its own rescue by the US government and said it would to turn the European unit around itself, sparking scepticism among European governments and trade unions.
The car maker is present in several countries and has a workforce of 50,000 that it plans to cut by 8,300.
Germany is set to lose more than 3,900 jobs from its total of 24,300.
Belgium would also pay a high price, with the closure of a site in Antwerp resulting in the loss of 2,377 jobs, while Spain is likely to lose 900 and Britain more than 500.
By 2014, Opel also plans to invest 11 billion euros in new models and environmentally friendly technology such as electric powertrains.