Berlin Ready to Give Opel €1 Billion Loan

After the US-based carmaker admitted that it may get closer to bankruptcy in early 2009, the German government is willing to give the German side of General Motors a 1 billion euro loan, Angela Merkel, Germany's chancellor, was quoted as saying by the Financial Times. GM's Opel brand experienced very low sales in the last few months, with sales falling by as much as 14 percent in Western Europe in the first 10 months of 2008. Moreover, global sales are down 6 percent, the aforementioned source added.

While the United States government is still considering General Motors' loan request, the German authorities seem to be more opened to talks, with a 1 million euro funding almost approved. “This is a special case. This is the basis on which we are talking,” Angela Merkel said, explaining that any potential loan directed to GM must remain in Germany, with investments especially focused on local facilities.

“We are talking about a safety net for the highly unlikely scenario that we should no longer have access to liquidity in the mid or long term,” Carl-Peter Forster, the European head of GM, said.

Opel fans are already accusing General Motors for taking down the German brand, but the US-based company owns Opel since 1929 and profits, sales and investments also recorded major boosts on most markets.

What's more important is that Opel currently employs 25,700 workers in Germany, with 100,000 jobs at suppliers depending on the company, according to estimates provided by Ferdinand Dudenhöffer, a car industry expert, to FT. But even so, Opel should be on the safe side when talking about the near future, with German carmakers still on an ascending trend in sales. For instance, Volkswagen's sales were reportedly up for the first ten months of 2008, but fell approximately 5.1 percent in October when compared to the same month of 2007.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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