The German government rejected Tuesday a plea from General Motors (GM), the world's biggest carmaker, for targeted aid for German car factories, DPA reported. At the same time, an existing government plan to subsidize car sales came unravelled, suggesting that the final form of Berlin's aid to the industry was still in play. With US-based GM teetering, the multinational's German arm, Opel, had earlier written to Chancellor Angela Merkel requesting she push harder for a 40-billion-euro (51.4-billion-dollar) loan from the European Investment Bank (EIB) to carmakers. Opel also requested soft loans to German buyers of new cars and a government buy-in of elderly cars to stimulate the flagging German car market. GM meanwhile appealed to its 55,000 workers in Europe to skip pay increases. A German labour leader, Rainer Einenkel, rejected that, saying Opel workers wanted raises. A government spokesman approached by Deutsche Presse-Agentur dpa said no automotive aid in addition to that adopted by Merkel's cabinet last week was planned. Merkel's coalition government agreed last week on an economic stimulus package that includes a suspension of vehicle tax for one year on new cars bought in Germany, with a double rebate for low-emission cars. However, that plan came unstuck Tuesday, with the parliamentary caucus of the Social Democratic Party objecting to its equal treatment of large and small cars. Social Democrats demanded a preference for smaller cars which use less fuel. Critics also said the rebate, expected to cost the government 1.4 billion euros, would be just a free gift to consumers who had been planning to buy cars anyway. Observers said that reopening the issue might conceivably lead to aid that would be more similar to Opel's proposals. The government spokesman said in Berlin the EIB credit to the auto industry was likely to be decided by European Union leaders at a summit next month. He defended Berlin's stimulus package, saying it also included soft loans to smaller companies, which could be claimed by many auto industry suppliers. In another sign of the industry's surplus inventory of unsold cars, premium maker BMW confirmed it would idle one of its factories for four weeks. The site at Regensburg would close from December 8 until January 7, BMW said in Munich.
