BERLIN - German Chancellor Merkel urged General Motors to quickly present a restructuring plan for its European unit Opel and said the U.S. automaker should not count on governments to shoulder most of the overhaul costs.
Merkel, who had brokered a deal for Canadian auto parts maker Magna and its Russian bank partner Sberbank to buy Opel, said that the workers needed a concrete solution that offered them job security.
We expect GM to present a reliable plan for Opel quickly, Merkel told the lower house of parliament on Tuesday as she laid out her policy agenda for her second term in government.
GM is counting on state aid to help finance its Opel revamp, but Merkel warned: This solution can only work if GM takes over the lion's share of the restructuring costs, which also means that it has to pay back the bridging loan.
GM said on Tuesday it had paid back another 200 million euros ($299.6 million) of the 1.5 billion euro bridge loan Germany awarded it to save Opel from being sucked into its U.S. parent's brief bankruptcy.
We now have an outstanding balance of 600 million euros. We expect to pay the balance before November 30, GM Europe finance chief Enrico Digirolamo said in a statement.
In St. Petersburg, Sberbank said it would not rule out legal action against GM, which torpedoed months of negotiations and infuriated Opel staff in Germany as well as political leaders in Berlin and Moscow.
Russia was counting on the scuppered deal to modernise its creaking domestic auto industry. Moscow has invited Renault to increase its 25 percent stake in carmaker AvtoVAZ.
Opel labour leader Klaus Franz said that GM CEO Fritz Henderson had told him during their meeting on Tuesday that Opel would receive a high degree of autonomy and independence within GM. The labour leader has said that autonomy was a precondition for any talks on staff and wage cuts.
Franz said in a statement that Henderson did not agree to labour's demand that Opel return to the legal status of an incorporated German stock company as proof of GM's willingness to relinquish some control.
The next step, according to Franz, was for Detroit's management to present a comprehensive, financially solid business plan for Opel in Europe until 2014.
We will then decide whether to enter further talks or negotiations, Franz said in a statement.
The labour leader, who heavily backed the sale to Magna, had told German magazine Stern that GM's sudden change of heart froze him solid, from which he was only able to recover from by downing a bottle of wine.
Frustration is tangible among the 25,000 GM workers in Germany. They had hoped Magna would breathe new life into Opel and had agreed to cost savings as part of the abortive deal.
We expect the company in the future to be as committed to its European sites as to its American ones, said Merkel. (Additional reporting by Noah Barkin in Berlin, Christiaan Hetzner in Frankfurt, Denis Pinchuk in St. Petersburg and Gleb Bryanski in Moscow; editing by Karen Foster) ($1 = 0.6676 euro)