German politicians warn of effects of GM financial aid as European leaders meet | ||||||||||||||||||||||||||
FRANKFURT (AP) -- Germany warned fellow European governments on Monday against offering financial aid to General Motors Europe in exchange for job guarantees, hours ahead of a meeting in Brussels to discuss the future of the company. Economy Minister Rainer Bruederle told ARD television that business competition rests on the concept of not providing financial aid to companies. He said the EU should focus on its aid rules, which attempt to keep competition between companies and countries even by scrutinizing and limiting financial assistance from states. GM Europe is expected to meet later in the day with EU officials as well as representatives from European countries where the company has plants and business interests, including Germany, the U.K. and Spain. Earlier this year, Germany had offered GM Europe a large bridge loan and further loan guarantees if it sold the majority of its struggling European Opel and Vauxhall units to Canadian car parts maker Magna International Inc. and Russian lender Sberbank. In turn, Germany expected guarantees from Magna and Sberbank not to close any of its four German plants, which would have saved thousands of jobs. That plan was made by the previous German government - which Bruederle was not part of. He said he did not support such a solution. GM backed out of the sale and decided to restructure GM Europe on its own earlier this month. The company's interim Chief Executive Nick Reilly said Friday that the main task at hand is to cut the division's capacity by 20 to 25 percent, which will most likely entail cutting thousands of jobs across Europe. Auto industry analyst Ferdinand Dudenhoeffer, meanwhile, said that GM would probably earn enough on its own this year to not need any aid from European governments. He said China and the U.S. home market would grow by more than 10 percent, helping the company solve its own problems. Furthermore, he said, any state aid would create "ruinous competition," in which the other German carmakers like Volkswagen AG, BMW AG and Daimler AG would suffer. --- On the Net: © 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy. | ||||||||||||||||||||||||||
|
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}
