German states deny aid promised to merged car-parts group
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.