Opel to shape up without state aid

Berlin: German Economy Minister Rainer Bruederle said on Thursday US carmaker General Motors does not need state aid for its European unit Opel because the company can shoulder the cost of restructuring by itself.

Bruederle told German television station ZDF that any company could submit an application for aid from Germany, which would then be assessed in accordance with the guidelines.

"But the good news is and this means the matter of Opel has been defused for me — the head of the supervisory board said we don't need it, we can do it on our own. And we checked this again with their press department, so this has been confirmed and expressly authorised," Bruederle said.

Bruederle gave no further details, but ZDF said in a statement he was referring to GM's supervisory board.

The broadcaster said Opel labour leader Klaus Franz told ZDF that GM's announcement was just "short-term propaganda" and that Opel's works council would not negotiate with GM until it had laid out a plan for the company for up to 2014.

Germany had agreed to advance 4.5 billion euros (Dh23.8 billion) worth of aid to support a bid for Opel fronted by Canadian automotive firm Magna International, but General Motors decided to keep Opel in the end, prompting angry recriminations from Germany.

In talks with GM representatives on Wednesday, Bruederle told the US company it would not be able to count on German support for an overhaul of Opel for the time being.

GM has said it can slash 30 per cent of Opel's fixed costs for a third of the price to taxpayers that Magna was charging.