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GM urges EU states to come to its aid

General Motorssaid on Tuesday that its European arm could run out of money by as early as next month, putting up to 300,000 jobs on the continent at risk.

Fritz Henderson, the struggling Detroit carmaker’s chief operating officer, said that GM would face a liquidity crunch “early in the second quarter” if emergency funds from European countries did not materialise.

“We would try to stay alive, but there’s no guarantee we could stay alive,” Mr Henderson told reporters on Tuesday at the Geneva motor show. “We would become insolvent at that point.”

Drawing a direct line between its pleas for government aid and possible factory closures, GM estimated that its excess capacity in Europe stood at 30 per cent, meaning it had three plants too many on the continent.

Carl-Peter Forster, GM Europe’s president, called for European countries hosting its car factories to share the “burden”.

GM has asked German states for €3.3bn worth of bailout funds in exchange for shares in what will become a semi-autonomous European arm, of which its German Opel unit is the largest component.

GM has also held talks with governments of the UK, Spain, Poland and other European countries about providing aid.

The request has been met with scepticism by some in Germany, where the government has pressed the company for more details on its plans, and assurances that none of the money would flow back to Detroit.

More at http://www.ft.com/cms/s/0/8fb98036-0...0779fd2ac.html