General Motors pledges to keep all German Opel plants open

A top General Motors executive completed a tour of Opel's four German plants yesterday pledging that none would be shut down as the US giant takes the axe to its loss-making unit.

The group's interim head in Europe, Nick Reilly, made the promise at Opel's Eisenach plant after earlier giving similar assurances at Ruesselsheim, Bochum and Kaiserslautern, between them home to 25,000 workers, half the European total.

"We value our Eisenach operations very highly," Mr Reilly said, calling them a "long term resource for Opel."

"It's a highly efficient plant and the people who are working there are very innovative," he said.

GM, after abandoning plans to sell Opel/Vauxhall unit, intends to slash capacity by about 20 per cent with the loss of 9,000-9,500 jobs Europe-wide, but it has not yet details where the cuts will occur.

According to the GM website, it employs around 7,000 people in Spain, 2,500 in Belgium and 4,700 in Britain, where Opel cars are sold under the Vauxhall brand.

In addition to around 50,000 employees Europe-wide, GM also has 3,400 workers in Sweden at its Saab unit. A planned sale of Saab to Swedish luxury carmaker Koenigsegg and its Chinese partner BAIC fell through on Tuesday.

Mr Reilly said Opel needs around €3.3 billion of funding in the coming two years.

GM wants European countries where it also has factories to provide the money, but it said on Monday that it would restructure the auto maker without state help if needed.

German magazine Spiegel said this week that the company had received offers of €400 million from Britain and between €300 million and €400 million from Spain, as well as proposed tax breaks from Poland.

Following talks among top finance ministry officials and GM executives in Brussels on Monday, the European Commission said that nations affected had decided not to make formal commitments before a further meeting on December 4.

Germany came under fire from other European governments for offering €4.5 billion in state aid to support GM's original plans to sell Opel, which includes Vauxhall in Britain, to Canada's Magna and Russian lender Sberbank.

Other countries believed that Berlin was offering the money in order to ensure that Germany would be spared large-scale job cuts or plant closures. European regulators were also scrutinising the aid.

GM has since walked away from the deal, which would have seen it sell a majority stake in the company that it has owned for 80 years.