Germany's Merkel cool on aid to GM for Opel

Detroit News staff and wire services

German Chancellor Angela Merkel signaled this week that General Motors Co. might have to rely on its own resources to restructure its Adam Opel GmbH subsidiary.

"This solution can only work if GM takes over the lion's share of the restructuring costs, which also means that it has to pay back the bridging loan," Merkel told the lower house of German Parliament on Tuesday.

GM Chief Executive Fritz Henderson traveled to Germany to meet with senior Opel officials after the U.S. automaker announced unexpectedly that it would keep Opel and restructure the unit.

GM previously negotiated a deal to sell a controlling stake in Opel to Canada's Magna International Inc., a deal strongly favored by the German government. Merkel's government had provided GM with $2 billion in bridge loans, which GM is ready to repay, and had offered more than $6 billion in loan guarantees to help finance the Magna-led deal.

GM estimates the cost to restructure Opel at $4.5 billion, and Henderson has said other governments where Opel has plants signaled they might provide aid.