GM withdraws all EU loan guarantee applications
General Motors' Opel unit said today it was withdrawing all applications for loan guarantees from European governments, saying it would fund a planned restructuring itself.autos Updated: Jun 16, 2010 18:28 IST
General Motors' Opel unit said on Wednesday it was withdrawing all applications for loan guarantees from European governments, saying it would fund a planned 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 firm said in a statement.
"GM's recently improved financial strength has also been a catalyst for making this decision."
GM had wanted 1.8 billion euros (2.2 billion dollars) in loan guarantees from European governments including Germany, Britain, where it owns Vauxhall, Spain, Poland, Austria and Belgium.
Germany, home to 23,000 employees, half the European total, last week rejected a request from GM to provide 1.1 billion euros in guarantees, saying GM has sufficient cash of its own.
GM, which emerged from bankruptcy and posted its first quarterly profit in three years in the first three months of 2010, had been prepared to put 1.9 billion euros into a restructuring plan, which foresees around 8,000 job cuts.
"We appreciate the support indicated by certain governments, especially the UK and Spain, but we need to move on," GM Europe chief Nick Reilly said in a statement.
"The decision of the German government last week was disappointing and means that the conclusion of these guarantees is again likely to be months away."