German GM offshoot Opel needs greater state guarantees
Berlin - Giant US carmaker General Motors' German offshoot Opel confirmed Friday that it will need greater state guarantees than requested to date.
The German government has said Opel required a total of 3.3 billion euro (4.2 billion dollars) in state guarantees, according to weekly Spiegel magazine. Previously, the car manufacturer had requested 1.8 billion euros of state securities.
Adam Opel GMBH confirmed an upward revision of the figures, but would not specify the amount.
Since the initial assessments, "the situation with regards to sales has changed so dramatically in the large European markets," the GM subsidiary said, to justify the revised requirements.
Sales in Spain had collapsed to a degree that had not been foreseeable in November 2008, the company said.
The market weakness is seen as a consequence of the international credit and financial crisis which has affected the entire car industry.
"On top of that are the consequences - painful for Opel - of exchange rate changes in markets such as Britain and the UK," the carmaker stated, adding that all these factors needed to be taken into account in the request for state guarantees.
A spokesman for the Finance Ministry said Friday, discussions about state guarantees for Opel would continue once the company presented an "overarching proposal" expected by the end of next week.
Germany said Wednesday it was up to the Opel to make the first proposal in joint efforts to rescue jobs at the US car company's German car manufacturing unit.
Opel operates factories in the German towns of Ruesselsheim, Bochum, Kaiserslautern and Eisenach. (dpa)