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Brussels proposes mini-summit over ailing Opel

Brussels — EU Industry Commissioner Guenter Verheugen proposed on Thursday a meeting of all European nations hosting GM plants, particularly the ailing Opel brand, to coordinate their response to the auto crisis.

"I will propose that member states where we have GM sites in Europe should hold an extraordinary meeting," Verheugen said as he arrived for a meeting of EU ministers in charge of competitiveness issues.

That meeting should reflect on "the way we want to react," he added.

GM’s difficulties in the United States have had a big impact on its European affiliate Opel, which is mainly active in Germany where it has four factories. However Opel also has a presence in Belgium, Britain, Poland and Spain.

General Motors also owns Saab but plans to pull out of the Swedish carmaker.

The auto industry is one of the largest and worst-hit industrial sectors in Europe, where the recession resulted in the weakest sales in 15 years in 2008, with new car registrations plunging by eight percent.

A collapse of General Motors’s German unit Opel would result in the loss of around 400,000 jobs across Europe, a German union official warned on Thursday.

GM has 55,600 employees in Europe including 26,000 at Opel in Germany. The union IG Metall’s Armin Schild told the Berliner Zeitung daily that its demise would have a huge ripple effect on auto parts suppliers.

On Monday, GM Europe executives presented Berlin with a restructuring proposal that would include 3.3 billion euros (4.2 billion dollars) in public aid from Germany and other European countries where it has factories.

The bailout, which could come in the form of state-backed loan guarantees or even a partial nationalisation, would see Opel stand on its own two feet and survive as a separate entity whatever happens to its ailing parent company.

"I would like to know what the various member states with GM sites are thinking of doing," said Verheugen, stressing that "GM doesn’t only talk with the German government."

He said he would like to see coordinated action, arguing that, "we need a common market not purely national."

Belgium is particularly concerned that a deal between Germany and GM could come at the cost of its Opel factory in Antwerp.

GM Europe said last Friday that its Opel division needed 3.3 billion euros (4.2 billion dollars) in aid to survive but offered the unit greater independence from its troubled American parent.

German Chancellor Angela Merkel, however, risks being accused of acting unfairly if the government decides to help the firm. Yet, six months ahead of elections, the demise of a German industrial icon would also go down badly with voters.

"We first need to know what the company plans to do," said German Economy Minister Karl-Theodor zu Guttenberg, who stressed that "there are still lots of questions to be answered."