GM begs Europe for government aid

General Motors’ struggling European operations will run out of sufficient money to operate in the second quarter of this year unless governments across Europe provide aid, GM President Fritz Henderson said at the auto show here today. To avoid that immediate and disastrous shutdown, GM will set its European operations up as an entity in which third parties will hold a considerable stock interest, perhaps more than 50%, Henderson said.

“It’s important that GM Europe stays within General Motors," Henderson said, adding that he was “not in a position to foreclose" any option, including European governments owning more than half of the new business.

GM is seeking 3.3 billion in euros or about $4.125 billion from the European countries

GM’s plan will still allow the company to use its global resources to develop powertrains and vehicle architectures that will be produced and sold around the world, Henderson said.

GM is not speaking with any private investors, making government aid the only alternative to a virtual shutdown when GM Europe runs low on operating money.

That would immediately put 250,000 to 300,000 people across Europe out of work, GM Europe President Carl Peter Forster said, adding that problem would cost governments more than the billions of dollars of aid GM is seeking.