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Some Hope at Opel as UK Agrees to Loan Guarantee

Still no support from Germany or Opel's German unions.

by on Mar.15, 2010

The viability problem remains centered in Germany where half of Opel's workers are.

Some small steps toward implementing the latest Opel/ Vauxhall “viability plan” occurred today in Europe as the UK government announced a €300 million loan guarantee to help secure Opel/Vauxhall’s operations in Britain.

Discussions with governments in other European countries continue, and Opel “is hopeful” that it will make similar progress.

In Spain, local management and unions reached an agreement to implement the planned restructuring measures at the manufacturing plant in Zaragoza. The agreement, which still needs to be ratified, calls for the elimination of 900 jobs there.

“Today marks an important step for the future of Opel/Vauxhall,” said Nick Reilly, Opel/Vauxhall CEO. “This shows significant progress in our efforts to secure loan guarantees from European governments and to get support from our employee representatives. We very much appreciate the support of Lord Mandelson and the British Government, which is a vote of confidence in our company. I’m also grateful for the Spanish government’s role in moderating the discussions between management and unions resulting in the important agreement reached early this morning.”

Last week, General Motors announced that it would triple the investment it was willing to make in its money-losing Opel/Vauxhall subsidiary from €600 million to €1.9 billion or ~$2.6 billion of the $5 billion needed to fix the company.   (more…)