General Motors’ Opel brand recently secured $358 million in funding from Spain’s central government, but the ailing automaker’s turnaround plan was thrown into doubt on Wednesday as Germany rejected GM’s request for $1.3 billion.
GM is seeking about $2.3 billion from various European governments to fund Opel’s turnaround plan, but the German government’s decision to reject the automaker’s request for aid could put that plan in jeopardy.
“I’m convinced GM has sufficient financial resources,” Economy Minister Rainer Bruederle, a Free Democrat, told reporters in Berlin today, in explaining why he turned down GM. “The state is not the better entrepreneur.” GM posted a $865 million profit during the first quarter of 2010.
Germany previously pledged to help Opel with its turnaround plan, but took back its offer after GM decided to cancel Opel’s sale to Magna. That decision could cost GM as it is now facing a huge financial shortfall.
Opel’s European market share slipped from 7.6 percent to 7 percent during the first quarter, despite the launch of a new version of the company’s Astra model.
References
1. ‘GM’s Request…’ view
