Russia Getting Opel Funds Concerns Rise

General Motors last week announced that it will sell a 55 percent of Opel to Magna International and the Canadian - Austrian can already start planning the future. The first major step is receiving a substantial loan package from the state of Germany which would be used for restructuring Opel and financing the company's operations. Only that some people involved in the matter are already raising concerns when hearing about Magna's plans for the money.

Magna hinted that some of the money will be used in the Russian auto sector which contradicts the German government's requirements for the loans to be used inside the country. Dirk Pfeil, one of the Opel trustees, told Frankfurt Allgemeine Zeiting that over 600 million euros of the 4.5 billion euro loan to be approved by the German government might be directed towards Russia and its local market.

As a result, he is afraid that some of Opel's operations might be transferred to Russia and thus lead to more job cuts in Germany. Magna hasn't commented on the news so far but earlier reports indicated that the Canadian - Austrian partsmaker is planning to cut around 10,500 jobs, 4,500 of which will be based in Germany. Opel currently employs 50,000 people, with half of them working at German facilities.

On other hand, Russian President Vladimir Putin said his country will be fully prepared to help save Opel. "This precisely defined procedure could be the prototype for other projects," he was quoted as saying by just-auto.com. "Cooperation builds mutual trust, and that is the most important in security issues," he added.