Germany Yet to Decide on General Motors Funds

In case General Motors finally decides to keep Opel and save the company by itself, Germany would have to support the company by providing a financial loan package, obviously supposed to preserve job cuts and protect local plants. But the state of Germany is yet to decide on whether to approve the money or not, according to German finance minister Peer Steinbrueck who said that it is way too early about this type of assistance.

"We must wait and see," Steinbrueck told Reuters a few days ago. "Are they prepared to, are they in a position to, where would they get the money from?" Steinbrueck asked.

General Motors is yet to decide whether to keep Opel or not but more and more voices are hinting that the former US bankrupt automaker is planning to stop negotiations and maintain the German brand. It would need around $6 billion to restructure Opel and pay its debts to the German government so such a goal could prove to be quite difficult

Meanwhile, Germany is still pressuring the parent company to make a decision and choose whether the brand should be owned by Magna or RHJ International. A decision should surface until the beginning of the Frankfurt Auto Show next month but, according to sources familiar with the matter, it won't come until October.

The reason? General Motors is still supporting RHJ whose offer is easier to implement because it involves less government participation. Meanwhile, Germany, through the voice of Chancellor Angela Merkel, is backing Magna because the Canadian - Austrian partsmaker would cut less jobs. From this reason, GM is delaying a decision that might affect Merkel's image just before the federal elections on September 27.