German government pledges to provide Opel with 1 billion euros in loan guarantees. But the government of Chancellor Angela Merkel has stipulated the money is to remain in Germany to shore up Opel's operations in country.
It was quite a site to see - GM Europe's CEO Carl-Peter Forster standing next to the German Chancellor at a press conference yesterday after his plea for aid. But GM has succeeded in its search for cash, at least in Germany. The German government has announced it is ready to provide a loan guarantee to Opel, GM Europe's main brand and one of Germany's largest automakers.
The Berlin government has said it will provide Opel with 1 billion euros in a loan but Chancellor Angela Merkel has stipulated that the money is to remain in Germany and used only to shore up Opel operations in country.
Opel has been hit hardest by the shrinking market in Europe. Opel (and its sibling brand Vauxhall) have seen sales fall 14 percent so far in 2008 compared to an overall drop of only 6 points in Western European car markets, according to ACEA, the association that represents European car manufacturers.
Quietly behind the scenes in Germany is VW, the automaker that has suffered the least in terms of sales. Its sales are actually up for 2008, in a market that has fallen off sharply. VW sales were down only 5.1 percent for October compared to the same month last year. The overall car market in Europe dropped sharply by 14.5 percent for the month compared to October 2007.