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Solutions for Opel's survival remains open
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14:35, March 20, 2009

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Opel car dealers in Germany on Thursday agreed in principle to put 150 euros (203 U.S. dollars) for every car they sell into a fund that will buy a stake in the automaker.

The agreement added to a series of possible solutions aimed at averting the collapse of the troubled auto icon.

Germany and the United States said they would work closely together to keep U.S. carmaker General Motors and its German affiliate Opel stay afloat.

"The German government will be reluctant to see Opel collapse without taking any measures," said Yin Tongsheng, a German studies professor at Beijing Foreign Studies University.

A bailout of Opel by the German government can't be ruled out despite that Chancellor Angela Merkel is under huge pressure from the opposition on the issue, Yin told Xinhua in an e-mail Wednesday.

To exit the crisis, Opel says it needs 3.3 billion euros (4.2 billion dollars) in aid from Germany and other European countries where it operates factories.

But Merkel said that GM must first overhaul the rescue plan it submitted to the German government as a precondition of possible aid.

German officials also said that it will take time to decide whether to bail out the carmaker, whose collapse would result in the loss of about 400,000 jobs -- 25,000 at the four Opel plants in Germany -- across Europe.

Opel can't count on any financial aid from its parent, since GM registered a 30.9-billion-dollar loss last year and said that 2009 would be a tough year, too.

Having already provided 13.4 billion dollars in aid, officials said the Obama administration was "open minded" about more support for GM.

Enormous doubt still hangs over a plan that the beleaguered parent GM is prepared to only have a minority stake in Opel.

"The glimmer of hope for Opel was becoming a bit brighter," German Economic Minister Karl-Theodor zu Guttenberg said Tuesday, after meeting with his U.S. counterpart Timothy Geithner.

GM has expressed willingness to hold a minority share in a possible joint operation of its European subsidiaries, which would also soothe German concerns that Opel's dependence on GM would result in state aid being transferred to the United States.

Whether Opel is able to stay afloat until the governments hammer out a solution to stave off the crisis remains in doubt, analysts said.

Source: Xinhua

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