February 24, 2009 / 12:26 PM / 11 years ago

Belgium's Flanders gets Ford money, GM talks due

BRUSSELS, Feb 24 (Reuters) - Belgium’s region of Flanders has secured a 60 million euro ($77 million) deal for a Ford Motor Co (F.N) plant in Belgium and will speak on Tuesday with General Motors (GM.N) about the future of struggling Opel.

Flemish Premier Kris Peeters and key regional ministers are holding meetings with U.S. auto executives in Detroit, a new tactic in European leaders’ efforts to keep auto sector jobs in high-wage Western Europe.

A Ford Genk spokesman said that Peeters and Ford Chief Financial Officer Lewis Booth agreed the previous day that Ford would invest some 51 million euros and Belgium’s Flemish regional government roughly 10 million euros in the plant.

“The money allows us to keep on producing cars, but it’s really the market that dictates the number of cars built and the number of people working at Ford Genk,” plant spokesman Dirk Steyvers said, adding that the cash was due by 2011.

Ford Genk laid off 1,500 temporary workers at the end of 2008 and has stopped producing cars on Fridays due to weaker demand. The company currently employs about 4,750 people and makes 1,000 cars per week, Steyvers said.

Premier Peeters will meet with GM officials on Tuesday to discuss what is in store for GM’s European unit Opel.

Opel’s plant in Antwerp employs about 2,500 people and produces some 200,000 Astras yearly.

GM has announced plans to cut 26,000 jobs outside the United States in the next year.

Belgian auto sales dropped 16.1 percent year-on-year in January, 14 percent in Germany and 31 percent in Britain.

So far, national responses to the industry’s troubles have differed. Germany said on Monday it would wait for GM to present a survival plan for Opel, due on Friday, before considering state guarantees.

Earlier this month France unveiled a plan to lend its own PSA Peugeot-Citroen (PEUP.PA) and Renault (RENA.PA) 3 billion euros each over five years at 6 percent interest, in return for keeping their sites open during the loan period.

Sweden has said it is willing to cover a loan to loss-making GM unit Saab if a new owner that would cover half the necessary funding came forward.

Heads of state from the European Union’s 27 countries will discuss the auto industry at an informal meeting on Saturday. ($1=.7804 Euro) (Editing by Karen Foster)

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