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A GM failure could mean a world of hurt

The car giant's foreign units are profitable. But if their U.S. parent goes under, the ripple effect could be wide.

December 07, 2008|Ken Bensinger, Bensinger is a Times staff writer.

In Eisenach, Germany, GM's Opel unit made a record 180,000 cars last year and was hoping to top that mark this year. But with sales flagging, the company was forced to furlough workers at reduced pay for three weeks in October. Now workers there worry about layoffs.

That could devastate Eisenach, which lives and dies by the automotive industry, said Jurgen Hinkel, a member of the workers' council at the Opel plant. "It's just a small town with relatively [little] industry" besides the automotive sector, Hinkel said.


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As in the U.S., GM has appealed to foreign governments for help. Last month, Opel requested about $1.25 billion in loans from Germany. Leaders of France and Spain have already pledged aid to the auto industry, with one regional Spanish government promising a 200-million Euro loan to Opel to help it begin production of a new four-door hatchback.

And last week, GM, Chrysler and Ford asked the Canadians for help with operations there.

But with no assurances from Detroit, some of GM's foreign workers are starting to worry.

"Some people here are saying it's the end of the world and that in a few years we will all be out of work," said Horacio Ortega, who earns about $470 a month at the GM truck factory in Toluca, Mexico. "Other people will tell you that everything is going to be OK. . . . The truth is that all of us here are very worried."

But others are more optimistic.

"Next year, things will get better," said Fernando Beltran, who also works on the assembly line there. "Do you think people can live without cars?"

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ken.bensinger@latimes.com

Times staff writers Henry Chu, Don Lee, Cecila Sanchez, Chris Kraul, Noha El-Hennawy and Sergei L. Loiko contributed to this report.

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