Two German states rejected Sunday a report
that they had promised half a billion euros in aid to a new
automotive-components conglomerate which is straining under its huge debts, dpa reported.
Ball-bearings manufacturer Schaeffler secured board control the previous day of
Continental, a maker of tyres and electronic parts, and said the merged group
aimed to become a second German "global champion" alongside Bosch in
the supplier industry.
The business newspaper Handelsblatt in a report to be published Monday said the
end of the struggle opened the way for the states of Bavaria and Lower Saxony to rush aid to the group.
The Bavarian premier's office responded that there had been talks with the
conglomerate, but no agreement yet.
The Lower Saxony premier, Christian Wulff, said, "there's no plan concrete
enough that one can say there will be state aid."
Schaeffler is based in Bavaria and Continental in Lower Saxony. They are
struggling under a total debt load of 22 billion euros (29 billion dollars).
Both are key industrial employers.
Handelsblatt said the help might be anything from loan guarantees to equity
investment and it was unclear as yet what was being offered. The parts industry
has taken a hit as world car sales have slumped in the recession.