EU Warns Germany Over Opel State Aid

Germany has a soft spot for Magna International and we all know it. Especially if we take into consideration Chancellor Angela Merkel's statements who repeatedly said she's ready to personally intervene in the negotiations to back the Canadian - Austrian partsmaker. But the European Union today stepped in and warned the state of Germany that it could not offer a funding package depending on the number of jobs to be affected.

Both Magna International and RHJ said they would reduce costs, with initial figures pointing to around 10,000 people to lose their jobs once Opel finds a new owner. But German officials emphasized that Magna's offer is more advantageous for GM's current brand, mostly because its plan would affect less people in the country.

"It cannot be subject to additional non-commercial conditions concerning the location of investments and on the geographic distribution of restructuring measures," EU Commission spokesman Ton Van Lierop was quoted as saying by "While the EU should aim to keep as many people as possible in jobs, national aid measures within this framework must not affect the freedom of manufacturers to develop their activities in the internal market."

On the other hand, General Motors said the RHJ's offer is better than Magna's mostly because it involves less government participation.

"The bid from RHJI is completed and would represent a much simpler structure and would be easier to implement. It would require less monetary participation by the government and would keep our global alignments solid, while still creating an independent Opel/Vauxhall organization in Germany. This remains a reasonable and viable option to be considered as the very difficult issues around the Magna negotiations continue to be worked," John Smith, GM group vice president (and GM’s chief negotiator for the sale of Opel), said in July.
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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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