General Motors has just announced that it will no longer pursue government aid for its Opel and Vauxhall brands. The reason? Neither company's financial situation has exactly changed since The General first began asking for loans from the EU a few months back, but GM simply says it can't wait for certain governments to get their ducks in a row. Evidently, the application process has been much more drawn out than the company originally anticipated.
To the German government authorities who think General Motors is financially sound enough to pay for Opel's restructuring without loan-guarantee assistance, Opel CEO Nick Reilly says that's not the case. "You need to remember that GM is first of all founded by U.S. taxpayers," Reilly was quoted as saying. "Frankly, GM needs the money it has got."
When General Motors decided it would keep Opel in the company's brand portfolio, it knew the price tag would be hefty. The Detroit News is reporting that price tag on The General's decision to retain its European arm is 1.9 billion euros ($2.7 billion in U.S. funds). And that's just GM's part of the bill. The automaker is also looking for 2.0 billion euros ($2.8 billion U.S.) in loans from European countries that have Opel facilities in their borders.