GM's Opel Wants German Loan Guarantees
STEVE INSKEEP, host:
As we've been reporting this morning, U.S. automakers are asking Congress for extra money to get through tough times, and they are not just asking this of the United States government. Yesterday, German Chancellor Angela Merkel met with executives from Opel. The General Motors subsidiary wants more than $2 billion in loan guarantees. Brett Neely reports from Berlin.
BRETT NEELY: Although Opel's been battered by the weak economy, it's in better shape than its parent, General Motors. But were GM to collapse, Opel, the third largest carmaker in Germany, could collapse too. Opel employs 25,000 people in Germany, plus thousands of others in factories and suppliers across Europe. At a press conference, Chancellor Merkel made it clear she wasn't about to start writing checks.
(Soundbite of press conference)
Chancellor ANGELA MERKEL (Germany): (German spoken)
NEELY: We discussed possible loan guarantees, she said, to ensure Opel's liquidity. Last week, major European insurance companies stopped providing credit insurance for suppliers doing business with GM and Ford. That means the suppliers might start asking for cash upfront, putting greater demand on Opel's finances. A credit guarantee would calm those worries, says analyst Tim Burkhardt.
Mr. TIM BURKHARDT (Analyst, Landesbank Baden-Wuerttemberg, Germany): Well, it would be - yeah, obviously it would be extremely helpful in terms of guaranteeing payments to suppliers, you know, guaranteeing salaries for the workers, and just making sure that everyone in the industry knows that they are a going concern and the confidence that that brings.
NEELY: Merkel was anxious to reassure the German public, which is already unhappy about bailing out banks. She said any money for Opel would have to stay in Germany and could not be used to bail out GM. For NPR News, I'm Brett Neely in Berlin.