GM Has the Resources to Fund Opel Restructuring

Even if it stepped under Chapter 11 protection earlier this year, General Motors has the resources to fund Opel's restructuring process, CEO Fritz Henderson said in a statement yesterday. Talking about GM's plans for Opel, Henderson said the US-based manufacturer will soon submit a proposal to Germany and other European governments but hasn't mentioned how many jobs will be removed or if it intends to close plants across Europe.

"We will be very shortly presenting our plan," Henderson said. "We feel confident that the plan will be financeable."

According to a report by Reuters, Opel still has the required liquidity to pay back around 900 million euros of a loan approved earlier this year by the German government. Additionally, GM is confident it can raise money to fund the restructuring process, with some countries already expressing their financial support for Opel/Vauxhall.

"We have noted GM's announcement today and want to work closely with GM to understand their plan for the business and what it means for the UK," a Department for Business spokesman said. "We have always said that if the right long-term, sustainable solution is identified, then the government would be willing to provide funding to this."

Rumors are claiming that GM's restructuring plan will be similar with Magna's, with approximately 10,000 jobs to be removed from Opel's EU operations.

"In terms of the number of people, basically we’re going to go through this with our people first before we go into it with you. All of the plans, again, whether it was ours or whether it was Magna's, called for a substantial reduction in capacity in the business and the need to right size the workforce," Fritz said in a statement.