Merkel Delay Imperils Opel If GM Files for Bankruptcy
German Chancellor Angela Merkel may be losing valuable time that General Motors Corp.’s Opel business doesn’t have as she holds out against taking a stake in the unit. Merkel says U.S. President Barack Obama’s rejection of GM’s recovery plan gives European leaders a 60-day breathing space to help save Germany-based Opel. Unions and analysts say governments need to take control of the division now or risk it falling victim to a restructuring focused on the U.S. business. “If GM Europe isn’t sorted out by the end of April it will run out of money,” said Tony Woodley, general secretary of the Unite trade union, which represents many of the 4,700 employees at Opel’s Vauxhall brand in the U.K. The failure of Opel would threaten the livelihoods of 50,000 workers, half in Germany, and could cost 250,000 jobs at suppliers and dealers. GM, surviving on $13.4 billion in U.S. government loans, is prepared to give up more than 50 percent of its European unit after 80 years of ownership as it seeks €3.3 billion ($4.4 billion) of state aid for a business that racked up $9.08 billion in losses between 2002 and 2008. Merkel told 3,500 Opel workers in Ruesselsheim yesterday that she will “make use of those 60 days” and that Germany will continue to seek a third-party investor to take a stake in Opel, adding that funding guarantees remain her preferred tool to support a rescue. She didn’t mention a state stake. Read more.