German states set to rescue GM's Opel

Regional governments in Germany are poised to buy a stake in General Motors' Opel unit in a rescue effort to separate the German carmaker from its ailing parent.

It is unclear how this might affect workers at Vauxhall's Ellesmere Port plant in the UK where Astras are made. GM and Opel have been negotiating a separation for weeks, media reports in Germany said today.

Ruesselsheim-based Opel's future "is only secure if it's separated from GM," said Klaus Franz, head of the carmaker's works council. Thousands of workers at Opel plants are on short-time working because of a dramatic plunge in sales.

Germany's state governments have the muscle to put up the cash that such a move would involve.

The protectionist measure comes as Germany's recession bites deeper than analysts feared and gravely threatens the country's export-led economy.