General Motors (GM) is to contribute €1.9bn (£1.7bn) to fund the restructuring of its European Opel and Vauxhall subsidiaries, more than tripling its previous investment pledge of €600m.
Unveiling the increased funding package, Nick Reilly, chief executive of Opel/Vauxhall, said the GM contribution would be made in the form of both equity and loans.
Opel/Vauxhall had estimated that it would need funding of €3.3bn. However, an additional €415m had been requested by European governments to offset the potential impact of adverse market developments.
GM will now contribute more than 50 per cent of the overall funding. As a result, the total of the loan guarantees requested from European governments will drop from €2.7bn to less than €2bn.
’GM’s €1.9bn commitment is the right course of action for Opel/Vauxhall and should clearly signal our determination to fix our business,’ said Nick Reilly.
’Our call for the additional funding was approved by GM’s senior management and supported by the GM Board of Directors. Meanwhile, we have shared this decision with the European Commission as well as the national and state governments involved. We hope that our strong commitment will be well received as a major milestone in our ongoing discussions about government guarantees to cover the remaining gap.’
’It is of vital importance for GM to demonstrate our commitment for our European operations,’ added Ed Whitacre, GM chairman and chief executive. ’Beyond the purely financial aspects, we see this as a major step towards instilling renewed trust and confidence into Opel/Vauxhall’s customers, employees, business partners, unions, dealers and European governments.’