The German government’s offer to come to the rescue of carmaker Opel has come in for hefty criticism, particularly from within Chancellor Merkel’s own party. Meanwhile Opel says it is reducing production for next year and cutting back to a 30-hour week in most plants.
hey say that if America sneezes, the world catches a cold. Now, it seems that if US auto giant General Motors has influenza then its European subsidiary Opel is going to straight to the German government for the aspirin.
On Monday Berlin agreed to consider extending loan guarantees to Opel so that it can insulate itself from the troubles at its parent company in Detroit. While Chancellor Angela Merkel was careful to insist that any such move would be a special case, the plans are already coming under fire. Some politicians from within her own party have attacked any hint of a bailout, with some arguing that German taxpayers should not be helping out what is essentially a US company.
Merkel met with Opel executives on Monday after they asked for a loan guarantees of around €1 billion ($1.26 billion) to ensure liquidity if Detroit-based GM files for bankruptcy. The entire US car industry is pleading for a government aid package of around $25 billion to weather the current problems wrought by the worst economic situation in decades.more
In Germany, where the auto industry is one of the biggest employers, some are concerned that any state aid to Opel could flow across the Atlantic to prop up its US parent company. Others worry that bailing out one company or one sector could have a snowball effect with troubled firms automatically turning to the state when the going gets tough.more