Europe car sales plunge, GM's Opel seeks bailout

* GM's Opel asks for 1 bln euros in German state aid

* Western Europe car sales plunge 15.5 pct in October

* Output cut signals at Renault, Daimler, Nissan

* EU Commission warns over U.S. bailout plan

By Gilles Castonguay and Christiaan Hetzner

MILAN/FRANKFURT (Reuters) - Europe's ailing auto industry looked to slash output further after dire October sales sent the market tumbling to its lowest level in years and forced GM's Opel unit to ask German taxpayers for a billion-dollar bailout.

A report that European firms had dropped insuring suppliers of troubled General Motors Corp (GM.N) and Ford Motor Co (F.N), along with the U.S. carmakers' ongoing attempts to expand government aid to the sector, provided compelling evidence of the dire financial health of the once proud 'Big Three'. [nN13354545]

Effectively acknowledging it could no longer rely on its Detroit parent to help it, GM's German unit became the first European carmaker to request financial guarantees from state authorities to keep its business running.

"The funds and guarantees that may be required would be invested in product development and manufacturing sites in Germany and would by no means be spent outside of Europe," Opel said in a statement, thanking politicians for their support.