GM offers Opel workers vague assurances

By Christiaan Hetzner and Sarah Marsh

RUESSELSHEIM/BERLIN (Reuters) - General Motors Co GM.UL dashed hopes on Tuesday that Opel would play a greater role within its vast empire and only offered vague assurances that Detroit would lengthen the leash on its rebellious European carmaker.

Separately, German Chancellor Angela Merkel warned GM not to count on European governments to bear the brunt of the burden to overhaul Opel, after Detroit refused at the last second to hand control over to a Russian-backed consortium built around Canada's Magna International Inc (MGa.TO), triggering an uproar across Germany.

"This solution can only work if GM takes over the lion's share of the restructuring costs, which also means that it has to pay back the bridging loan," she told the lower house of Parliament on Tuesday.

Merkel staked her own reputation on the deal brokered over some six months and greased with billions in state aid from Germany -- ultimately undoing her own efforts after she had engendered too much hostility in other countries, which felt that Berlin was protecting domestic German jobs at the cost of Spain and Britain.

GM claims it can slash 30 percent of Opel's fixed costs for a third of the price to taxpayers that Magna would have charged; but the fierce backlash and near-total lack of trust in GM's management threatens its hope of raising 3 billion euros (2.68 billion pounds) in state aid to restructure Opel.

Chief Executive Fritz Henderson came to Ruesselsheim on Monday to mend fences, but he offered little in the way of goodies to German unions and politicians, who have demanded greater autonomy from Detroit's headquarters in exchange for their support.

Berlin has indicated that a key condition of state aid is ensuring that funds are spent in Europe on Opel, and have called on GM to provide a water-tight legal separation to prevent any suspicion of a financial leak in the direction of Detroit.

Speaking to reporters on Tuesday, Henderson showed little interest in marketing Opels outside the strict confines of Europe or even elevating the unit's status from a limited liability company to an incorporated stock company as proof that the carmaker would gain a greater measure of self-determination.