Opel turned its back on state assistance for its restructuring drive on Wednesday, abandoning months of talks with European governments and leaving parent General Motors to fund the program.
GM's European arm said while its cash requirements were unchanged, the process of obtaining state aid had proven too slow and complex.
Our application was put in more than six months ago, and we followed the process that the governments laid out and asked us to follow. We had no idea it would take this long, Opel Chief Executive Nick Reilly told reporters in a conference call.
The move comes as a surprise after GM for months insisted it needed European governments' help to restructure the loss-making European brand by slashing 20 percent of capacity and rejuvenating the bulk of the model range through end-2014.
It also comes a week after Germany's federal government turned down Opel's request for Berlin to underwrite 1.1 billion euros ($1.4 billion) of its borrowing.
Opel now needs a further 1.6-1.8 billion euros of funding from GM, Reilly said, in addition to the 1.9 billion euros the U.S. parent company had already committed to contributing for the restructuring plan.
The money comes from GM's worldwide resources. We will obviously be planning the liquidity as best we can to minimize the amount of draw we have, Reilly said, adding Opel had no plans to amend its restructuring plan to cut more costs.
GM had originally asked European countries with Opel plants -- including Spain, Britain, Austria, Hungary and Poland -- to provide the lion's share of its funding needs but later promised to cover almost half of the sum.
German Economy Minister Rainer Bruederle's decision last week not to back Opel's borrowings came just after Berlin unveiled an 11.2 billion-euro government savings program.
Bruederle said he welcomed that GM was taking responsibility for its European arm, saying he hoped that Opel could now concentrate on making cars again.
Opel has a future if GM doesn't gamble it away, Bruederle said following Opel's statement on Wednesday.
German Chancellor Angela Merkel last year made talks to save Opel and its 25,000 German jobs a priority in Berlin, brokering a deal to sell the carmaker to Canada's Magna.
At the last minute GM decided to keep and restructure Opel but said it needed state aid to return Opel to profitability no later than 2012.
GM's turnaround from bankruptcy to profitability in just 12 months, which helped it hang on to Opel, has undermined the unit's efforts to win state aid.
We still need that money. Nothing has changed from the point of view of Opel. But GM's position has gotten somewhat better, Reilly said.
Excluding funds in escrow, GM had gross cash of $23.3 billion at the end of March compared with $14.2 billion in debt. Its first-quarter funds from operations exceeded capital expenditure by about $1 billion.
(Reporting by Maria Sheahan; additional reporting by Jan Schwartz in Hamburg and Rene Wagner in Berlin; Editing by Greg Mahlich and David Cowell)