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GM asks for government money, this time in Europe
Looking toward a badly needed restructuring of its European operations, the company today asked European Union officials and the ministers of several governments -- including Germany, Belgium, Britain, Spain, Sweden and Poland -- for financial help with the $4.9 billion project. A GM representative cited the high cost of restructuring efforts in the U.S. as the main reason the company cannot feasibly foot the bill itself.
The fear being voiced by the various governments is that GM will push a pay-for-play deal, meaning that the countries that fork over the most money will be those that avoid the plant closings and job losses that inevitably will come with GM's planned 20 to 25 percent reduction in carmaking capacity. Word coming out of GM is that its plan is already in place and would be unaffected by which countries contribute, or how much.
Still, there has been a lot of posturing. Both Belgium and Germany said unequivocally before the meeting that they did not want to join a subsidy race, nor should any individual country hold private negotiations with GM before a joint response could be formulated on Dec. 4. Germany’s deputy economy minister, Jochen Homann, has said all countries have committed to the joint approach.
A representative of Belgium has said he expects GM to send its restructuring plan to the governments by the end of the week.
(Source: Detroit Free Press.)
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