General Motors Corp's European brands are near collapse, with Germany's Opel in need of more state funding and the Swedish government rejecting Saab's plea for state aid until its business plan was sound.

Filing for protection from creditors on Friday, Saab said it would present a reorganization proposal within three weeks while court filings revealed it estimates its losses in 2008 and 2009 at around 3 billion Swedish crowns ($340.1 million).

Stockholm's Industry Minister said the information received about Saab's situation on Friday was not enough for the Swedish government to provide the carmaker with loan guarantees.

I have told GM we have doubts about this business plan, Maud Olofsson told a news conference.

Separately, the White House and U.S. Treasury Department on Friday convened the first meeting of a task force set to determine by March 31 whether GM and Chrysler LLC, can be competitive.

While Fiat agreed with lenders on a new line of credit, Moody's said weak cash flow and lower contributions from Volvo and Nissan <7201.T> and led it to downgrade Renault's debt two notches to Ba1, the highest rated junk category.

Opel became the first European carmaker to seek a government bailout since the crisis began. It requires a total of 3.3 billion euros ($4.15 billion) in liquidity to keep it afloat through the end of 2011 when it launches four new models including the Chevy Volt-sister Ampera, a company source said.

Opel will ask for total state guarantees for loans that would amount to around 2.6 billion euros, with contributions in labor cost cuts from its workforce to provide the remaining 700 million euros.

Apart from a continued plunge in European car markets and a painful weakening in key currencies, the presentation of GM's comprehensive viability plan introduced a totally new and unpredictable variable into Opel's financing equation.

For example, the new Insignia manufactured in Russelsheim with right-hand drive and a Vauxhall badge is priced for the UK market according to a stronger sterling-euro exchange course.

We end up losing a couple of thousand euros per car, the source said. And we also have a huge problem with the rubel. You cannot increase prices (on Opels exported to Russia from western Europe) as fast as the currency depreciates.

In a statement sent to Reuters, Opel finance chief Marco Mollinari confirmed new developments mean it now requires more than the initial 1.8 billion euros in guarantees.

A source at the German government said Opel had explained the situation could become dramatic by March with its cash tight and a threat looming of balance-sheet insolvency.

News of the higher funding needs could weaken political supporters who have argued in favor of extending guarantees, conjuring up images of Hypo Real Estate .

The German covered bond specialist received more than 100 billion euros in aid after multiple funding shortfalls were discovered at its Irish state financing unit Depfa, sparking a controversial debate over its possible nationalization.


A person familiar with the matter said that Berlin was informed in advance of growing problems at Opel.

It's entirely clear that (Opel) cannot become a bottomless hole. When you talk about a plan then there must be one sum that can sustain a business model until time 'X' without any ifs ands or buts, that person said.

Stockholm's Industry Minister called GM's business plan for Saab still too optimistic and warned the parent the government would not hand out guarantees to companies not sound or solid.

Olofsson, who has repeatedly ruled out owning carmakers, demanded that GM answer how it plans to make Saab profitable and provide the resources necessary to launch new car models.

In a first step of goodwill, GM's global purchasing boss Bo Andersson said the parent would establish a mechanism that ensures suppliers to Saab are paid in a timely fashion.

Proposing to concentrate design, engineering and manufacturing in Sweden, Saab said Friday the court-appointed administrator's reorganization would take three months and require independent funding as it seeks a new investor.

Even though we have not been actively searching for new partners, we have had many knocking on our door showing interest in Saab, its chief executive, Jan-Ake Jonsson, told a news conference in the carmaker's hometown of Trollhattan.

The crisis has come at a tough time for Saab just as it is scheduled to launch badly needed new models like the upcoming 9-5, which were set to rejuvenate its elderly product range.

Opel itself plans to roll out the fourth generation of its bestseller, the Astra hatchback, and all knew versions of the Meriva and Zafira minivans in the coming years.

(Additional reporting by Veronica Ek in Trollhattan as well as Jan Schwartz, Rene Wagner, Niklas Pollard and Marcus Wacket; Editing by Rupert Winchester, Patrick Fitzgibbons and Matthew Lewis)