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Opel to Build Mini Car Without German Incentives

New 2013 B car requires €90 million from U.S. taxpayers.

by on Sep.27, 2010

A small Mini competitor is coming from Opel courtesy of U.S. taxpayers.

Opel/Vauxhall will build its latest model, an all-new car smaller than the sub-compact Corsa, at its Eisenach plant in the East German state of Thuringia, General Motors Company has confirmed.

Earlier this year the German government – facing a taxpayer revolt and big deficits – refused to provide €1.1 billion in subsidies GM wanted for Opel, saying the company had enough cash to keep Opel running by itself. The cash, of course, came from U.S. taxpayers, who along with the United Auto Workers Union now own the biggest stakes in the company, which employs about 24,000 people in a reunited Germany. The GM bankruptcy bailout by taxpayers remains politically unpopular in the U.S.

The €90 million investment announced by GM appears minimal since an existing production line will be used. Nonetheless, because it will be U.S. taxpayer financed, it could cause controversy during the upcoming U.S. Congressional elections.

“This is a further milestone in the growth strategy for our business,” said Opel/Vauxhall CEO Nick Reilly, who is attempting to reverse precipitous drops in both sales and market share at the ailing maker.