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GM asks Europe for help

General Motors (GM) has approached the European countries it operates in for a financial boost, following reports that it will run out of cash next month.

According to The Times, Opel, GM's German division, asked Berlin for €1 billion (£843 million) in help if GM filed for bankruptcy.

GM Europe has also approached Britain, Spain, Sweden, Belgium and Poland to try to secure sources of cash.

GM, along with Ford and Chrysler (the Big Three) has also asked for a €25 billion emergency loan from the US government to help the industry get through the global recession.

GM Europe said: “While European and global governments worked quickly to address the financial crisis with direct support to banks, the effects are now being felt across the entire economy. Vehicle sales in Europe have dropped significantly since July, which means revenues for all automakers, including GM, have declined significantly.

"At the same time, regulatory requirements on vehicle manufacturers are at a very high level. This is creating a near-term liquidity crunch for many automakers.”

The Big Three have until December 2 to present their plans to the US to prove why they deserve the €25bn loan.

The Retail Motor Industry Federation and Society of Motor Manufacturers and Traders will hold a meeting with Business Secretary Lord Mandelson tomorrow to press the Government for help in the economic downturn.

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