Opel to invest 11bn euros in new cars

GM is now hoping for aid from the German government

General Motors' (GM) Opel unit will invest 11bn euros ($15bn; £9.7bn) "in a new product offensive" over the next five years, the carmaker has said.

The investment forms part of a plan to break even within two years, it added.

GM management also reiterated its plans to cut 8,300 jobs across Europe and to close a plant in Antwerp.

The carmaker hopes its proposals will help convince European governments to provide billions of euros in loans to help the firm return to profitability.

Nick Reilly, head of GM Europe, said the carmaker's plans had been approved as "financially sound and a realistic road map to success" by an independent auditor.

The auditor's report was now with the German government, which was considering whether to provide aid, he added.

GM is looking for a total of 2.7bn euros in loans from European governments.

Mr Reilly said it had asked for about 60% of this total to come from the German government, on the basis that 60% of the company's employee costs are incurred in Germany.

Generating growth

The 11bn euros will go towards three major initiatives, Mr Reilly said.

First, Opel would be launching eight new models this year, and another four in 2011.

Second, the carmaker aims to be "a leader in alternative propulsion in Europe". To this end, Opel has "aggressive plans" for its Ampera electric car, Mr Reilly said.

Finally, it will look to push its exports to the Middle East and Asia Pacific, "where economically viable".

Mr Reilly added that the Vivaro van would continue being built at the Vauxhall plant in Luton in the UK until 2013, after which GM would "investigate new business opportunities".

GM did, however, confirm that 369 jobs would be lost at the plant - a slight increase on the 354 job losses announced last November.

Mr Reilly also said there were plans to add a third shift at the Ellesmere Port plant in the UK, which builds the Vauxhall Astra, from next year.

As well as expanding to increase revenue, GM Europe needs to cut costs to return to profit.

It will cut production by 20% to cope with reduced demand, with thousands of jobs going in the process.

Of the 8,300 job cuts already announced, 6,900 will go in manufacturing and 1,300 will go in sales, Mr Reilly said.

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