EU calls for GM crisis talks

Brussels called on Thursday for a crisis meeting to deal with General Motors as frustration spilled over about a lack of information on the ailing carmaker’s plans for its European businesses.

Günter Verheugen, European Union industry commissioner, said that European countries were increasingly unhappy about the way the company was dealing with the situation, particularly its lack of transparency on key issues.

Speaking after a scheduled meeting of EU industry ministers in Brussels, he said matters that were causing concern included the lack of information over GM’s plans for its EU plants and the extent to which the company intended to retain responsibility for those assets.

Mr Verheugen said Brussels believed that it was necessary to bring together industry ministers from countries that had an interest in GM’s future so the situation could be co-ordinated and information shared. But he stressed: “This is not a meeting to prepare a European rescue plan.”

The automaker has production facilities in a number of EU states, including Germany, Sweden, Poland, Spain, Belgium and the UK. But it also has suppliers who depend heavily on its business, located more widely across the 27-country bloc.

No firm date has been fixed for the crisis meeting, according to commission officials, although it is likely to be “soon”.

GM has already asked Germany for €3.3bn ($4.1bn) to help Opel, and has begun approaching the governments of the UK, Spain and other countries where it has plants about emergency funds.

It wants to ring-fence its European operations as a separate corporate entity in which it will offer outside investors stakes, and has offered to put €3bn into the business, primarily in-kind contributions. GM last month cut its Swedish Saab operation loose, allowing the unit to file for protection from its creditors and seek an outside investor.

GM said that it would cut its costs in Europe by $1.2bn in a plan submitted to the US Treasury last month.

The carmaker employs about 55,000 people in Europe, and estimates that up to 300,000 people on the continent depend on it for jobs, including parts suppliers and dealers.

But Mr Verheugen was emphatic that Brussels drew a sharp distinction between the systemic risks that could be posed by problems at some of Europe’s largest banks and the situation in manufacturing companies.

“There is not a single company . . . which would cause the collapse of a whole economy,” he said.

He also stressed that Brussels did not have the funds or the desire to mount sector-specific rescue plans, and pointed out that even the car industry itself was not asking for a European rescue plan.

“There will be no sector-specific rescue plans whatsoever,” he said.

Source: The Financial Times