Germany's Merkel Rules Out State Taking Stake In Opel

BERLIN (AFP)--German Chancellor Angela Merkel ruled out Sunday having the state take a direct stake in Opel to save the troubled car maker.

Merkel, in a public television interview to be aired late Sunday, said taking a state in the company would "not be good news" for its employees.

"We do not have the intention" to take a direct stake in Opel, said the conservative chancellor, who is scheduled to visit an Opel factory in the western German town of Russelsheim on March 31.

Labor Minister Olaf Scholz, a Social Democrat in Merkel's governing coalition, had evoked the possibility of the state getting a stake in Opel, a subsidiary of U.S. automaker General Motors Corp. (GM).

"We shouldn't be afraid of such a decision," he said in an interview published in Sunday's edition of Bild newspaper. But he added that it "should not be for the long-term."

His comments raised the stakes within the coalition, which includes Social Democrats and Merkel's Christian Democrats, six months before legislative elections.

Opel has said it needs the EUR3.3 billion ($4.5 billion) to avoid bankruptcy under a plan presented in late February, which also foresees the German car maker gaining a large degree of autonomy from Detroit-based GM.

German authorities have deemed a GM Europe proposal for Opel too vague and have given themselves several weeks to decide whether to bail out the car maker, which employs 26,000 people in Germany alone.