EU slams informal financial pledges to GM Europe

EU Industry Commissioner Guenter Verheugen has criticised informal financial pledges to General Motors by countries vying to save jobs at factories belonging to the automaker's European unit.

"I understand that some countries have already made informal promises. I find that alarming," he told Spiegel magazine in comments to be published tomorrow.

According to Spiegel, GM Europe has received offers of €400 million (Dh2.18 billion) from Britain and between €300m and €400m from Spain, and Poland has offered tax breaks. Belgium offered up to €500m for the GM factory in Antwerp to stay open, but this was declined, said the magazine.

Verheugen said he wanted to "avoid putting jobs up for auction" at GM Europe, called Opel in most countries and Vauxhall in Britain.

The commissioner holds talks tomorrow in Brussels with European economy ministers and representatives of GM to discuss the future of the US carmaker's European business.

The newly named head of GM Europe Nick Reilly is expected to attend the session.

GM stunned the European auto sector earlier this month when it scrapped a decision to sell off its European operation to Canadian auto parts maker Magna International and Russian state bank Sberbank. The US company decided instead to hold on to the division and restructure the unit itself.

The automaker is counting on financial support from European governments where factories of its European unit are based for help with the restructuring as part of a €3.3bn plan.

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