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Weeks after killing a deal to sell its Europe-based Opel unit, GM has asked EU leaders to help pay $5 billion in restructuring costs to turn its European division around.

A GM flag blows in front of the Opel plant in Bochum, Germany. The automaker backed out of a deal to sell its European operations earlier this month.(Martin Meissner/Associated Press)

General Motors’ need to bear restructuring costs in the United States and Canada would make it “quite difficult” for the automaker to cover European funding alone, said Nick Reilly, the CEO of GM’s Adam Opel GmbH and Vauxhall units.

“We are looking for support of any government that feels willing to be able to provide us some financing support in the medium term,” he told reporters after meeting officials from European Union nations where GM makes cars. “We have indicated that we will provide some of the funding.”

But at the talks in Brussels, European leaders were cool to the idea of even considering individual negotiations and vowed to avoid them before a Dec. 4 meeting where they will co-ordinate their response to the restructuring plans GM will unveil later this week.

Germany’s deputy economy minister Jochen Homann said there was a commitment from all countries not to make any promises before GM puts forward the restructuring plan.

Kris Peeters, the head of Belgium’s Flanders region, said he expects the company to send that plan to governments at the end of this week and that “there will be until the meeting next week, no further individual meetings with GM.”

The amount each government might offer has no bearing on where and how many jobs GM might cut, Reilly insisted, because “the plan that we have is already in existence.”

‘People at the plants will be the first to hear ‘?GM European head Nick Reilly

The gamesmanship comes after Germany earlier this year drew fire for offering a large bridge loan and loan guarantees if GM Europe sold the majority of its struggling European business to Canadian car parts maker Magna International Inc. and Russian lender Sberbank.

Earlier this month, GM ruffled feathers of its own when its board backed out of that deal, but Belgium and others were angered by reports that Magna won German backing in the first place because they had promised to save jobs in Germany and cut posts elsewhere, even at more efficient plants in Poland or Belgium.

GM’s decision to ditch the Magna sale and hang on to the units has reawakened those fears ? and caused officials to call in EU regulators as referees at the Monday meeting to discuss GM’s restructuring.

Tense negotiations

Reilly refused to give details of the plan to cut some 20 to 25 per cent of the company’s car-making capacity before worker representatives have been consulted.

“People at the plants will be the first to hear it,” he said.

EU commissioners said in a statement they agree any financial support to GM would not be linked to where it made investments on job cuts. They also said state aid had to facilitate car makers’ efforts to adapt production to falling demand.

Ahead of the Monday talks, Germany and Belgium rushed to the moral high ground by claiming that they did not want to join a subsidy race or see any state payments to the company linked to guarantees that it would keep jobs.

Britain and Poland have indicated that they are ready to support Opel operations in their countries ? but have not said how much they might give. Spain says any support it gives would have to be agreed to by the company and its workers.

Germany appears reluctant to offer GM the $6.7 billion US loan it had promised Magna and has yet to pledge the company any more money.

German Foreign Minister Guido Westerwelle said Monday that GM should focus on protecting jobs and must repay any German loans “to the euro and cent” because the money “belongs to taxpayers and not GM.”

With files from The Associated Press (more…)