Germany Cold-Shoulders GM on State Aid

You could see this one coming given the humiliating circumstances under which the German Chancellor learned that GM (MTLQQ.PK) was pulling out of the Magna (MGA) deal.

The BBC is now reporting that Germany will give General Motors no aid to restructure it’s business. That’s 4.5 Billion Euros they now need to come up with.

Economy Minister Rainer Bruederle told GM executives that they had to be responsible for restructuring the unit.

Germany had previously offered 4.5bn euros ($6.7bn; £4.1bn) to support Opel and protect German jobs if the company was sold to car parts maker Magna.

On cancelling the sale last week, GM said it would still seek state aid.

The German minister’s comments now raise question marks over whether GM will get it.

"I expressed my expectation that General Motors should basically carry out the financing itself," Mr Bruederle said.

Will Obama now come up with the funds? There don’t seem to be a whole lot of solutions here.

Comments

[Leftfield:]

Those are sacrosanct union jobs. After an appropriate period of huffing and puffing, I would expect aid to come.
If our taxpayers are somehow stuck with the tab, as in the recent GM buyout of union Delphi for $2.9 billion, I will once again be sorely disappointed with the money management of our public servants.

Nov 12 07:51 AM

[Davewmart:]

I can't see the German Government letting all the union workers go if GM plays hardball.
Some sort of messy compromise seems likliest to me, with money from the US and German Governments under various disguises.

Nov 12 08:12 AM

[ChiefPontiac:]

OF course we will be stuck with it...Merkel and Putin are angry with GM. Who will lend the money now? This is a $8-$10 Billion re-work that Gm has ignored until they got the bailout money. I do not know why this is OK....we need jobs now.

200,000 American jobs are available with assets the taxpayers already own....see savingpontiac.org

Nov 16 12:16 PM

[BeachRider:]

I don't see how more USA TARP money will be made available to 'the new GM'. The ONLY thing I care about is recovering the TARP. It is not a gift. I do believe that USA TARP money was intended to stopgap the need for Capital and keep Michigan from going to 50% unemployment. That was a correct use of taxpayer money, so long as we get it back.

OTOH, USA taxpayers have NO responsibility to automotive employment in Germany or England. If those governments have NO interest in doing TARP-like things with Opel/Vauxhaul, then I suspect that those factories will survive only-if they make money in the short-haul. Best wishes to our friends in Germany and England, but this is US Taxpayer money being used in a private context.

Nov 16 01:24 PM