General Motors gave up on Wednesday on getting state aid from European governments for its loss-making Opel unit, saying it now had the financial firepower to finance a restructuring itself."The validity and reasons for requesting government guarantees have ... not changed but the process has proven to be much more complex and longer than anticipated," the US auto giant said in a statement."GM?s recently improved financial strength has also been a catalyst for making this decision."
The German car maker Opel, which was rocked this year by industrial uncertainty, said Tuesday that its German sales gained 31 percent in 2009 owing to a government cash-for-clunkers scrapping bonus.Opel said the sale of 339,000 vehicles was its best result since 2005 and gave it a domestic market share of 8.9 percent.While its US parent company General Motors weighed selling the loss-making division, Opel benefitted from state aid worth 2,500 euros (dollars) for drivers who junked their old cars and bought new ones.
General Motors' interim Europe chief completed a tour of Opel's four German plants on Wednesday pledging none would be shut down as the US giant slashes capacity at its loss-making unit.Nick Reilly gave the promise at Opel's Eisenach plant, after earlier giving similar assurances at Ruesselsheim, Bochum and Kaiserslautern, between them home to 25,000 workers, half the European total.
ON FRIDAY, the ongoing European debt crisis took a dramatic turn as Der Spiegel reported a meeting of finance ministers in Luxembourg, supposedly gathered to discuss a Greek threat to leave the euro zone. The euro-zone exit rumour was forcefully denied, and no wonder; whether or not it was true, the mere hint of the possibility of exit could generate a run on euro-denominated deposits in Greek institutions. Ultimately, European officials suggested they were meeting to discuss changes in the rescue packages extended to Greece and other peripheral countries.
MARKETS were jolted this morning as rumours spread that Greece had gone to the International Monetary Fund and the European Union to request a debt restructuring. The Greek government has denied that this is so, but restructuring increasingly seems to be a matter of when, not if. Yields on 2-year Greek debt are up 7% and 10-year yields are up over 5%. Both are at crisis highs. There is no question of the Greek government's ability to borrow in private markets any time soon.