Opel rescue plan

German carmaker Opel revealed details of a restructuring plan Tuesday that will involve 8,300 job cuts. General Motors' European subsidiary has also officially applied for 1.5 billion euros ($2.1 billion) in state aid from Germany.

"We have no time to waste," Reilly told a press conference in Frankfurt, near Opel's headquarters in Ruesselsheim. "We need a plan that is going to be realistic about the tremendous economic pressures we face," he said.

Somewhat less than half the job cuts - 3,911 out of a total of 8,300 - would take place in Germany, Reilly said. But he did confirm that the Opel plant in Antwerp, Belgium, would be shut down, costing another 2,377 jobs.

Spain would also be affected with 900 job losses, while 500 more would be cut in Britain, the Opel chief executive said. Opel and its British sister brand Vauxhall employ nearly 50,000 people across Europe.

State aid

Reilly said that Opel needed 3.3 billion euros ($4.5 billion) to finance its rescue plan and is seeking 2.7 billion euros from the countries where Opel has operations. Opel says it plans to invest 11 billion euros through 2014 to modernize and streamline its European plants.

In Germany, Roland Koch, the state premier of Hesse where Opel headquarters is located, criticized Reilly's announcement on Tuesday, saying that in his estimation "it would be appropriate for GM, as the owner, to clearly raise its own contribution to the restructuring and repositioning" of Opel.

"The conscientious handling of taxpayer's money and the interests of employees will be the focus when evaluating the proposal for state aid," Koch said.

German Economics Minister Rainer Bruederle and British Business Minister Peter Mandelson said at a joint press conference last Friday that they would carefully consider any appeal for aid after a business plan had been presented.

gb/dpa/AP/AFP/Reuters
Editor: Rob Turner