GM chief says he can run carmaker as global group

General Motors (GM), the US carmaker, is confident that it can raise sufficient finance to restructure its European Opel unit, which owns the two Vauxhall plants in the UK. Fritz Henderson, the chief executive, said yesterday that the company would unveil restructuring plans for Opel soon. “We feel confident that the plan will be financeable,” he said. The US Government initially placed restrictions on GM’s ability to shift funds to its overseas units in return for $50 billion of bailout money. But the financing provided by the US Treasury to launch the new GM in July, as the company came out of bankruptcy, has different restrictions and would allow GM to send funding directly to Opel if needed, Mr Henderson said. The company could provide liquidity to Opel by reducing royalties payable by the European unit to headquarters. Because of improved economic conditions, GM is also generating revenue on its own, as is Opel. Mr Henderson said: “We need to be careful about it but we can run a global business.” The company said this week that it would need an estimated $3 billion (?1.8 billion) to complete the restructuring of Opel, which is likely to involve the loss of 10,000 jobs across Europe. It hopes to raise much of this from European governments. Lord Mandelson, the Business Secretary, has given assurances that Britain would be prepared to back GM to preserve jobs at Vauxhall. In addition to the $3 billion, the company faces repaying a €1.1 billion (?985 million) bridging loan made available to it this year by the German Government. Opel has repaid €900 million and Mr Henderson said that it had the liquidity to pay back the rest. He declined to say how many jobs would have to be cut at Opel or which plants would be closed. GM’s decision to keep Opel rather than selling a majority stake to a group that includes Magna International, of Canada, and Sberbank, of Russia, has touched off controversy in Europe, straining diplomatic relations. President Obama assured Angela Merkel, the German Chancellor, in a telephone call on Wednesday night that he was not involved in the decision by GM’s board. Meanwhile, tens of thousands of angry Opel workers poured on to the streets of Germany yesterday to vent their anger against GM’s U-turn on its sale of the carmaker. Even greater ire was felt in government offices in Berlin, where politicians, bitter at what they perceive as a transatlantic stab in the back, are awaiting the aftershocks of the failed sale, which was to underwrite jobs for German workers. The mood at the company head office at Rüsselheim and in other cities where Opel has plants, including Bochum, Eisenach and Kaiserslautern, was grim. Workers fear GM will now dismiss many more of them than might have gone in the Magna deal. But the atmosphere was perhaps sourest of all in Berlin before a weekend of celebrations aimed at commemorating the 20th anniversary of the toppling of the Berlin Wall. One ministerial aide said: “No one in government wants to be pictured swigging champagne as the fireworks go off, for fear of what the next news about Opel will be.”