General Motors has finally reached an agreement with Opel employees regarding a restructuring plan. A few “complex details” of the plan still have yet to be discussed, but according to German newspaper Frankfurter Rundschau, Opel workers accepted pay cuts in return for a stake in the company.
Details remained scant, but GM is still hoping to receive state aid from European (mainly German) governments. Germany’s Focus news outlet said that Chief Executive of Opel/Vauxhall Nick Reilly recently sent a letter to the Economy Minister of Germany reiterating the need for $1.6 billion in aid. The office confirmed that it has received the letter but provided no details about its content. We also know that GM applied for a €2.7 billion loan and – according to government officials – the request is being examined at this time.
General Motors abandoned plans to sell Opel last year, instead opting to keep the European division. Since then, GM has bounced back from bankruptcy, earning an $865 million profit for the first quarter of 2010.
In March, GM said that it would triple the funding for Opel’s turnaround to €1.9 billion. This larger amount comes in the form of equity and loans that remove the risk of too little liquidity. GM intends to cut thousands of jobs across Europe from the 48,000 workers that Opel and Vauxhall currently employ. Nearly half of these jobs are located in Germany, but final job cut amounts have not yet been announced.[Source: Freep]