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Tue, Feb 24, 2009 - Page 10 News List

German minister says Opel cannot be allowed to fail


The collapse of struggling General Motors (GM) unit Opel could cost German taxpayers up to 3 billion euros (US$3.88 billion) and it would be better to rescue it instead, German Finance Minister Peer Steinbruck said on Sunday.

If 25,000 workers at Opel and a similar number at supplier firms lost their jobs, there would be a high price to pay in terms of unemployment benefits and loss of tax revenue, Steinbruck told ARD television.

“Would it not be more logical to provide aid [to the company] so that these people can continue to earn their living?” he asked.

Opel, like its parent company and peers elsewhere, has seen its sales devastated by the worst global economic slump in decades while Washington has given billions of dollars to its parent GM to help it survive the crisis.

GM’s restructuring plans, however, are radical, including the sale of many of its overseas operations, dropping brands and cutting thousands of jobs.

Steinbruck said it was up to Opel to take the measures it felt necessary first before state aid could be considered.

“I want firstly to see a restructuring plan for the company ... to see what steps they are prepared to take before thinking whether, as a last resort, the government should come to their aid,” he said.

German New Economy Minister Karl-Theodor zu Guttenberg said earlier on Sunday he would lobby for Washington to rescue struggling Opel.

Zu Guttenberg told Bild am Sonntag newspaper he had established an informal US-German working group with US Treasury Secretary Timothy Geithner and he would use a visit next month to hold more meetings with key officials.

“It is indispensable that General Motors and Opel consider rapidly... how they want to keep jobs in an economically healthy way,” he said.

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