Loans repaid

As GM prepared to release details of its restructuring plan for its European Opel unit, the company's European Chief Executive Nick Reilly indicated that the threatened plants in the western German cities of Bochum and Kaiserslautern would not be closed after all.

After ameeting with the premier of the state of North Rhine-Westphalia, Juergen Ruettgers, Reilly called the Bochum plant, which is in the state, and where Astra and Zafira cars are assembled, "an important location in the future."

And after a meeting with the premier of the state of Rhineland-Palatinate, Kurt Beck, he said that that state's plant, Kaiserslautern, which makes motors, will "play an important role in Opel" in the future.

There are altogether four Opel plants in Germany. Between them, they employ around half the European total of 25,000 Opel workers.

Reilly's statements came as a relief to many of the 5,000 workers in Bochum and the 3,300 in Kaiserslautern, who had feared closure under the forthcoming restructuring.

Workers demand investments

Details of the GM restructuring plan for Opel are expected to be released no later than Wednesday. But the number of layoffs is expected to be slightly smaller than GM's earlier estimate of between 9,000 and 10,000 jobs cut across Europe.

Speaking to Reuters about the restructuring plan, Lothar Sorger, Opel's deputy labor leader at the Kaiserslautern plant, said: "It's of crucial importance to us that there is a complete financing until 2014."

"We do not want at all to find ourselves in the situation that they once again cancel (investments in) models and new development work," he said. Labor leaders at Opel had agreed with jilted suitor Magna to contribute 265 million euros ($397 million) in annual savings despite the Canadian auto parts supplier's plans to cut around 10,500 jobs.

So far they have not ruled out offering the same deal to GM after GM reversed its decision earlier this month and decided not to sell its European carmaking business to Magna after all.

But Opel's European works council boss, Klaus Franz, has linked concessions to greater independence for management in Opel headquarters in Ruesselsheim, Germany, and investment plans that would preserve all the manufacturing plants and as many jobs as possible.

Loans repaid; Merkel awaits 'thank you'

Meanwhile, on Tuesday GM said it had repaid the controversial 1.5 billion euros in bridging loans it got from Germany that allowed it to keep its Opel unit afloat in the first place.

In a speech in Berlin, German Chancellor Angela Merkel said: "I can tell you that the last funds (received by) General Motors have been paid back, which means that the Opel operation has not cost the German taxpayer a cent."

She added that she expected "a comprehensive thank-you letter from General Motors in a few years."

Merkel stood up for her decision to offer the loan to the US firm, saying: "It was absolutely right ... to build a bridge."

After back-and-forth negotiations, GM agreed in September to sell a majority stake in Opel, which includes Vauxhall in Britain, to Canadian auto-parts maker Magna and Russian state-owned lender Sberbank.

Warning from Brussels, visit from Spain

The news in early November that GM intended to keep the company after all infuriated Merkel and the rest of the German government, which broadly supported the Magna-Sberbank deal. In her Berlin speech on Tuesday, Merkel said she would have preferred to see the carmaker sold to the Magna consortium.

Earlier this week, as it became clear that GM would have to set its restructuring policy in Europe, officials in Brussels warned countries not to enter into a "subsidy war" whereby countries with Opel plants would compete to offer restructuring cash to GM in a bid to stave off job losses on their own territory.

Spanish Prime Minister Jose Luis Rodriguez Zapatero was due to meet Merkel on Wednesday, in part to discuss the Opel plan. The company employs some 7,200 people in Spain.

jen/Reuters/AFP/AP
Editor: Michael Lawton