General Motors gave up on Wednesday on getting state aid from European governments for its loss-making Opel unit, saying it now had the financial firepower to finance a restructuring itself.

"The validity and reasons for requesting government guarantees have ... not changed but the process has proven to be much more complex and longer than anticipated," the US auto giant said in a statement.

"GM?s recently improved financial strength has also been a catalyst for making this decision."

GM had wanted 1.8 billion euros (2.2 billion dollars) in state guarantees from European governments including Germany, Britain, where it owns Vauxhall, Spain, Poland, Austria and Belgium.

With GM's credit rating so weak, having cast-iron government guarantees would have helped it raise money on capital markets much more easily and at lower interest rates.

GM, which emerged from bankruptcy and posted its first quarterly profit in three years in the first three months of 2010, had been prepared to put 1.9 billion euros into a restructuring plan which foresees around 8,000 job cuts.

Its decision to throw in the towel followed the refusal last week by Germany, home to 23,000 Opel employees, half the European total, to provide the lion's share of the guarantees or 1.1 billion euros' worth.

The German government, which last year was annoyed by GM's 11th-hour decision not to sell Opel to Canadian auto parts maker Magna and Russian lender Sberbank, said that the Detroit giant had enough cash of its own.

"We appreciate the support indicated by certain governments, especially the UK and Spain, but we need to move on," GM Europe chief Nick Reilly said in a statement.

"The decision of the German government last week was disappointing and means that the conclusion of these guarantees is again likely to be months away."

"To be clear, our funding needs have not changed and we were led to believe that loan guarantees made available to other European companies under the EU program to help offset the impact of the global economic crisis, would be equally available to Opel/Vauxhall.

"But, after a very long process defined by governments, this has turned out not to be the case," Reilly said.

The British government had committed guarantees for 330 million euros of bank loans and a similar amount had been indicated from Spain.

Germany was ready last year to provide guarantees to Opel if GM sold it to Magna and Sberbank, but GM scrapped the deal in October.

Chancellor Angela Merkel, whose popularity has fallen sharply in recent months, is seen as wary to hand out more taxpayers' money after promising tens of billions of euros in guarantees to prevent a eurozone collapse.

The company was due to hold telephone news conference at 1430 GMT.

Germany dealt General Motors a major blow on Wednesday as Berlin turned down a request for 1.1 billion euros (1.3 billion dollars) in loan guarantees for its loss-making Europe unit Opel/Vauxhall.

Economy Minister Rainer Bruederle said he had rejected GM's application for help for Opel from a special fund set up to help firms hit by the recession because the US auto giant had enough funds itself.

"I am confident that Opel has a good future without credit guarantees," Bruederle said.

"GM is naturally very disappointed, as is Opel, with this decision," GM Europe chief Nick Reilly told reporters. "I don't particularly understand the reasons why."

But the door to public money may not be definitively closed to the Detroit giant, which emerged from bankruptcy and posted its first quarterly profit in three years in the first three months of 2010.

German Chancellor Angela Merkel on Thursday was set to discuss possible options with the heads of the four German states where Opel has four plants and employs some 23,000 workers, around half the European total.

"We understand that the Laender, the federal states of Germany, have been very supportive of Opel and of our application in the past, and it is quite possible, I understand, that we might be able to achieve some of the same end through guarantees from the states," Reilly said.

GM is prepared to pump 1.9 billion euros into its restructuring plan, which foresees around 8,000 job cuts, and wanted 1.8 billion euros in loan guarantees from European governments including the 1.1 billion euros from Germany.

Reilly said that the government in Britain, where GM owns Vauxhall, had agreed to provide around 330 million euros in guarantees and that he was confident Spain would offer around the same amount.

He said that Berlin's decision would not affect GM's restructuring plans.

"It's certainly my objective to carry out the plans we have," he said.

Unions, which fear that GM will now close some of its German plants, immediately slammed Bruederle's decision, with Opel works council chief Klaus Franz calling it "shameful."

"The economy minister is leaving Opel staff standing in the rain, counter to the facts and counter to the interests of the plants in Germany," Franz said.

Germany was ready last year to provide guarantees to Opel if GM sold it to Canadian auto parts maker Magna and Russian lender Sberbank, but GM scrapped the deal in October, annoying Berlin in the process.

Merkel, whose popularity has fallen sharply in recent months, is seen as wary to hand out more taxpayers' money after promising tens of billions of euros in guarantees to prevent a eurozone collapse.

Merkel "would have difficulty justifying aid for Opel," said Stefan Bratzel, head of automobile research at Germany's University of Applied Sciences (FHDW) in Bergisch Gladbach.

US automaker General Motors said Tuesday it would more than triple its contribution to a rescue of ailing European division Opel/Vauxhall, providing more than half the total after calls from European governments.

Opel said in a statement that GM would invest 1.9 billion euros (2.6 billion dollars) "as part of its commitment to the European viability plan," more than three times an initial offer of 600 million euros.

Opel/Vauxhall chief executive Nick Reilly called the decision "the right course of action" for the company and said it "should clearly signal our determination to fix our business."

The funds would be provided in the form of both equity and loans, Reilly added.

GM had initially estimated Opel/Vauxhall would need 3.3 billion euros to get back on track before European governments called for an additional 415 million "to offset the potential impact of adverse market developments," the statement said.

With GM putting up 1.9 billion euros of the new total, 3.7 billion euros, governments would be asked for less than two billion euros in loan guarantees, compared with 2.7 billion initially, it added.

Reilly said at the Geneva Motor Show in Switzerland that the move was aimed at encouraging European -- especially German -- state backing for Opel by demonstrating the "very high" priority the US parent group places on Opel.

"We have to recognise that most of the money is from the US government and taxpayers. So this is not easy," he told journalists after GM's cash injection.

"We would expect Germany to be a significant contributor, if they are going to contribute," he said.

Reilly said talks with German authorities were likely to intensify in the next couple of weeks. British, Spanish and Polish funding levels were still not known.

"We're optimistic but we can't say 100 percent," he added.

GM had decided at first to sell Opel/Vauxhall but changed its mind after its own rescue by the US government and said it would to turn the European division around itself, sparking scepticism among European governments and trade unions.

The car maker is present in several countries and has a workforce of 50,000 that it plans to cut by 8,300, mainly in Germany and Belgium.

GM's increased support removes however "any potential liquidity risks during the restructuring this year," the statement said.

Opel said it hoped the GM commitment, given despite "high-priority demands on its liquidity," would be seen "as a major milestone in our ongoing discussions about government guarantees."

The statement quoted GM chairman and chief executive Ed Whitacre as saying the group wanted to show support for Opel/Vauxhall and perhaps smooth tense relations with European labour and political leaders.

"We see this as a major step towards instilling renewed trust and confidence into Opel/Vauxhall's customers, employees, business partners, unions, dealers and European governments," he said.

On February 24, the German government and parliament said Opel's rescue plan was insufficient and called for for "firewalls" to prevent German aid from being transferred to Opel's parent company in the United States.

Experts say there is 20 percent excess auto production capacity in Europe, but Reilly said on February 9 that an independent study demanded by Germany found that Opel's plan "is financially sound and offers a realistic roadmap to renewed business success."

Opel should "break even in 2011 and make a decent profit in 2012," he added.

He acknowledged in Geneva nonetheless that the market in Europe was weak and was expected to say that way in 2010.

Ailing carmaker Opel is considering launching an electric car for inner-city use to tap what it sees as a high-potential market, the firm's boss said in an interview Sunday.

"We are thinking about a small electric vehicle," the chief of the General Motors unit, Nick Reilly, told Germany's Bild am Sonntag newspaper.

"We believe there is strong potential for growth in cities across the world," he added, predicting that "various governments are going to provide fiscal support for this kind of vehicle."

An Opel spokesman said the new model -- which would be smaller than the Corsa -- was expected to be launched in three years, in both electric and conventional fuel versions.

Hit by falling sales, Opel this month unveiled a sweeping restructuring plan along with an appeal for countries that host Opel and its British sister brand Vauxhall to stump up 2.7 billion euros in state aid.

By 2014 Opel has said it plans to invest 11 billion euros in new models and environmentally friendly technology such as electric powertrains.

Its first electric-only car, the Ampera, is scheduled for delivery in 2011. Its wheels are powered exclusively by an electric engine, with a small fuel engine integrated to recharge its batteries.

European Union industry ministers pressed the European Commission this month to devise a common strategy to develop electric cars, seen as both an environmental necessity and an opportunity for growth.

Current EU president Spain wants the electric car to feature in the EU's 2020 strategy, an economic reform project aimed at ensuring prosperity and sustainable growth for Europe.

The German government and parliament, which have been asked for money to help rescue Opel, said Wednesday that a plan to restructure the ailing car maker was insufficient.

Opel has sought 1.5 billion euros (2.0 billion dollars) from Berlin, which awaits the results of a private audit before saying whether the government will give Opel the money it wants.

German authorities have called for "firewalls" to prevent German aid from being transferred to Opel's parent company General Motors in the United States, according to the record of a parliamentary economy and technology committee meeting.

Lawmakers also regret the lack "of a commitment of Opel's own capital" and that Opel "does not say how it will avoid bankruptcy" after 2013.

Moreover, "the participation of other European countries that host Opel sites is not clarified," the document said.

Opel also has plants in Austria, Poland and Spain.

The auto manufacturer's restructuring plan depends on a total of 2.7 billion euros in state aid.

Lawmakers from the conservative CDU/CSU parties have insisted meanwhile that "there must not be special treatment" for Opel, considered by some a weak link in an industry trying to deal with 20 percent surplus capacity across the continent.

The automaker wants to eliminate 8,300 jobs from a total of around 50,000 in Europe. Germany would lose more than 3,900 from a total of 24,300.

Around 8,300 jobs will be slashed in Europe, Opel boss Nick Reilly said on Tuesday, as he unveiled a long-awaited plan for the future of the ailing General Motors unit and its 50,000 employees.

The proposal to restructure Opel and British sister brand Vauxhall has now been officially submitted to German authorities, he said, and included a planned investment of 11 billion euros (15 billion dollars) by 2014.

Opel is seeking at least 1.5 billion euros in German aid.

Fewer than half the cuts, a little more than 3,900, would take place in Germany, Reilly noted, while confirming the closure of a plant in the northern Belgian city of Antwerp with the loss of 2,377 jobs.

Spain would also be affected with the loss of 900 jobs, while more than 500 were slated to be cut in Britain.

"We have no time to waste," Reilly told a news conference in Frankfurt, near Opel's headquarters in Ruesselsheim.

He added that, with the new plan, "we expect to break even in 2011 and make a decent profit in 2012."

According to a study by independent auditors demanded by German authorities "the plan is financially sound and offers a realistic roadmap to renewed business success," Reilly said.

Opel needs a total of 3.3 billion euros to finance its plan, and hopes to get 2.7 billion of it from countries where Opel and Vauxhall have operations.

Reilly said that since 60 percent of Opel's workforce was in Germany, the car maker was looking for "an approximate allocation of the 2.7 billion" on that basis, suggesting it would ask Berlin for around 1.62 billion euros.

An economy ministry source told Dow Jones Newswires meanwhile that GM had asked the federal government and German states that host Opel sites for 1.5 billion euros.

The head of the German state of Hesse, where Ruesselsheim is located, however, called for GM to plough more of its own money into the restructuring.

"According to our first impression, it will be necessary for GM, as the owner, to considerably increase its contribution to the restructuring," state premier Roland Koch said.

GM has committed 600 million euros to the plan, and Reilly stressed Tuesday that "the cash that is in General Motors is essentially US taxpayers' money.

"It is not surprising that the United States would expect Europe and European governments to help a European entity and not have the US taxpayer pay for all of the restructuring and growth of Opel," he added.

German Economy Minister Rainer Bruederle and British Business Minister Peter Mandelson told a joint press conference Friday they would consider any appeal for aid immediately after the business plan was presented.

GM had initially decided to sell Opel/Vauxhall but changed its mind after its own rescue by the US government, and has decided to turn the European unit around itself.

Opel is also holding talks with unions on the restructuring, and Reilly said: "I fully respect the necessary role of unions in these difficult decisions.

"At the end, we both want the same thing, a successful company," he said.

Unions at General Motors unit Opel on Tuesday warned widespread strike action is a possibility as they refused to accept a planned Belgian plant closure at the troubled carmaker.

"A strike is the last resort, but management has to realise that we will undertake all manner of (industrial) action -- and that can include strikes," said Peter Scherrer of the European Metalworkers' Federation (EMF).

"There will be neither sacrifice nor concession by the unions, by the workers at other plants, if the decision is not overturned," Scherrer said in Antwerp after a meeting also assembling Austrian, British, German, Hungarian, Polish and Spanish unions.

The company announced last week its intention to close down an auto factory in Antwerp, probably by the summer, with the loss of 2,600 jobs.

That decision was accompanied by a switch in production for a line of sports utility vehicles (SUVs) to South Korea, against which unions have embarked on legal action.

Scherrer said workers at other GM Europe plants had agreed not to fill in for Antwerp workers during any stoppage.

"We make the GM management aware of a long history of European solidarity in common action," read a joint declaration by labour movements representing workers at Opel and Vauxhall. "This will be exercised if necessary."

The statement was signed by the European Employee Forum (EEF), the EMF and the European unions and works councils represented at GM Europe.

General Motors Europe announced on Thursday it is to close an entire car production plant in Belgium, making 2,600 workers redundant and ramping up an already tense climate of social unrest.

"Our intention today is to stop production in a matter of a few months," new chief executive Nick Reilly told a Brussels press conference, suggesting June or July as the likeliest date.

A new line of small sports utility vehicles will now be built in South Korea instead, he said.

It is the second major factory closure announced by carmakers in Europe this month, after Italy's Fiat acted to shut a plant in Sicily.

Europe-wide restructuring at GM's Opel unit is expected to shed 8,300 jobs from a total of almost 50,000 -- half of which are located in Germany.

Reilly said that about 4,000 of the jobs going would be German positions.

The Belgian factory in northern Antwerp, home to the world's biggest diamond market and one of the world's five largest ports, is the only GM plant so far to face being locked up.

Reilly said there was no alternative, and rejected ideas that the plant could be adapted for components manufacturing -- as discussed during the US parent company's earlier plan to sell its European arm.

"It's not GM's intention to get into the components business," he said.

Joeri, who has worked for Opel for 22 years, said: "We are seen as antiquated objects."

"It's an absolute catastrophe for Belgian workers and manufacturing," added Walter Cnop, of the CSC union's metalworkers' branch.

Slamming management "arrogance" and a decision he said was "based on political considerations in no way assessed on economic grounds," Cnop immediately announced an open-ended blockade.

Cnop said that from Tuesday of next week, "the factory will remain blocked until such time as we decide to let finished cars out."

Belgian industry federation Agoria warned that at least 5,000 jobs could be lost due to knock-on effects.

An emergency meeting with the office of Belgium's devolved Flemish government leader Kris Peeters later on Thursday will precede redundancy and resettlement talks.

Reilly said he understood workers' disappointment and anger, but underlined: "We have cars for them to build and we'd like to continue normal work" until the gates close for the last time.

Opel needs 3.3 billion euros ($4.7 billion) to finance its new business plan, and hopes to get 2.7 billion euros from countries where Opel and its British sister brand Vauxhall have operations.

Germany originally offered the bulk of the sums Magna wanted, but faced a political backlash based on European Union state aid rules as rival plants sensed they would be tossed on the scrapheap in order to keep Germans in work.

Antwerp unions have consistently maintained that a plant in Bochum, western Germany, had a weaker economic case, and called for European labour solidarity.

Employee and union representatives accused management of breaching a contract with the company's European Works Council on the SUV line, saying Antwerp employees had already been engaged on the project since 2007.

"Our projection of how many of those we will manufacture has gone down," said Reilly of a slump in demand globally for 4x4 cars, adding that it would be "more economic" to build them in Korea.

The Antwerp closure comes at a time of sensitive industrial relations in Belgium, as elsewhere.

The world's biggest brewer AB Inbev, maker of famed Belgian beer brands such as Stella Artois, Leffe or Hoegaarden, risks being unable to meet distribution requirements in its home or surrounding countries owing to blockade action in protest at job cuts.

Belgian firefighters also mounted a spectacular protest over career prospects on Thursday, spraying government buildings and main traffic arteries with foam, while prison guards are themselves out on strike amid complaints over working conditions.

German automaker Opel said Friday that General Motors' Nick Reilly has been named new chief executive responsible for Opel and its sister brand Vauxhall as part of a broad restructuring.

Opel's supervisory board named Reilly, already head of General Motors Europe, to the post, making him "responsible for all Opel/Vauxhall activities worldwide," a statement said.

Reilly, from Britain, has already begun drawing up a tough restructuring plan for Opel that includes 8,300 job cuts and could cost European governments up to 2.7 billion euros (3.9 billion dollars) in state aid.

He replaces Hans Demant, who gave up the CEO post to become a GM vice president in charge of global intellectual property rights, the statement added.

In December, US parent GM began to replace directors at Opel after deciding not to sell the European division. It previously named GM financial director Walter Borst as head of Opel's supervisory board.

Opel also named Mark James, another Briton, as its new chief financial officer.

Like Reilly, who has worked at GM for 35 years, James has experience with GM brands in Asia, having worked at the Korean operation Daewoo.

Rita Forst, from Opel's technical development centre in Ruesselsheim, west Germany, was named head of engineering.

The new board "will address our tasks quickly and with plenty of energy," Reilly said in the statement.

"We in particular will be on the offensive and will want to increase our market share in Europe," he added.

Opel nonetheless said Friday that around 12,000 of its workers in Germany, roughly half its domestic workforce, will work fewer hours in January and February owing to slumping sales.

One of Reilly's first tasks will be to convince Opel's works council, on which sit union officials, to accept the permanent job cuts which it rejected in late December

The signing of a final deal by US auto giant General Motors to cede control of its loss-making European unit Opel looked set to be delayed on Thursday by disputes with unions over job cuts.

A final contract was expected to be signed at a lawyers' office in Frankfurt mid-afternoon German time but sources and unions said that there were still several issues to be resolved.

"It could be tomorrow (Friday) or Saturday," an industry source told AFP.

"All we know is that there will probably be no signature today. There is a new meeting tomorrow but there are so many differing reports that nobody really knows," said Rainer Einenkel, head of Opel's works council at its factory in Bochum.

GM chief executive Fritz Henderson said in South Korea earlier on Thursday only that the deal "might" be inked this week.

The deal foresees GM, which emerged from bankruptcy earlier this year and is now majority owned by the US government, selling 55 percent in Opel to Canadian parts maker Magna International and Russian state-owned lender Sberbank.

Under a preliminary agreement announced on September 10, employees will own 10 percent in a "New Opel" and GM will retain 35 percent.

As Opel struggles in a depressed European market with too many cars being made for too few customers, Magna is expected to cut around 10,500 jobs in an effort to compete against giants like Toyota, Ford and Volkswagen.

The deal was championed by Germany, home to around half of Opel's 50,000 employees, with Chancellor Angela Merkel's government offering 4.5 billion euros (6.7 billion dollars) in state aid.

Merkel, elected for a second term on September 27, wants other European countries where Opel has factories, such as Britain, Spain, Belgium and Poland to provide taxpayers' money too.

But instead, the deal has run into criticism there, with these countries unwilling to stump up cash for a deal that they see as guaranteeing only German jobs and keeping only German plants up and running.

EU Competition Commissioner Neelie Kroes is scrutinising the transaction to determine if Germany's state aid is contingent on German plants not being closed, which would make it illegal under EU law.

The Canadian firm has been conducting a charm offensive in recent weeks in an attempt to get trade unions in Britain, where Opel operating as the Vauxhall brand employs 5,000 people, and in Spain, home to 7,000 employees, on its side.

On Tuesday, Magna won support from Unite, Britain's biggest union, and the British government, by promising to keep Vauxhall's two factories open until at least 2013.

In Spain, however, where Magna is thought to want to slash 1,300 jobs, talks with unions broke down without agreement on Tuesday.

Talks in Spain were still ongoing on Thursday afternoon, a source in the regional government of Aragon told AFP.

In Belgium, where Opel's Antwerp plant is seen as a prime target for closure, thousands of workers, including hundreds from Germany, held a mass protest last month. The plant employs around 2,500 workers.

European governments have been reticent about providing state aid, with British business minister Peter Mandelson telling the BBC on Tuesday that there was "some way to go" before the government agrees to offer financing.

"We don't sign a blank cheque," Mandelson said.

Germany, however, has said it is confident of a deal.

"We are still waiting for the various responses," Economy Minister Karl-Theodor zu Guttenberg said on Wednesday. "I gather ... that the atmosphere has improved greatly in Britain."