Opel Gets First €300 Million in Government Loans

Things are getting better for the German ailing manufacturer Opel as the company has just received the first 300 million euro loan from the 1.5 billion bridge financing agreement with the German government. The announcement comes only days after the company announced it has reached a deal with Magna International, the Canadian-Austrian manufacturer who is likely to become the new Opel owner together with Russian investors.

Basically, the German government hopes the money will help Opel to maintain its domestic operations and complete the partnership agreement with Magna International. The two sides have already signed a Memorandum of Understanding to continue work on finalizing a partnership agreement for Opel.

“We’re extremely grateful to the various members of the German Government, led by Chancellor Merkel and Vice Chancellor Steinmeier, the various German ministries as well as the federal state governments of Hesse, North Rhine-Westphalia, Rhineland-Palatinate and Thuringia, for their approval of this important agreement. We are also thankful for this tremendous responsiveness. The immediate payment ensures Opel/Vauxhall to continue its business operations in normal course," said GM Europe President Carl-Peter Forster.

The German government announced last weekend that it decided to seal a deal with Magna International, detrimental to Fiat who has been longly seen as the favorite to take over the German brand. As a result of the deal, Magna has already revealed some of its plans regarding Opel, including bringing the brand in Canada.

"We want to build Opel cars in Canada," Magna chairman Frank Stronach told The Globe and Mail on Saturday according to drive.com.au. "I know we can be competitive, I know we can create jobs in Canada and the United States. If we don't change the culture, North America's got no chance to be in the automobile industry, absolutely no chance."