A German spokesman on Friday ruled out any state bailout for struggling U.S.-owned carmaker Adam Opel and retail giant Karstadt/Quelle following announcement that both companies plan to slash over 15,000 jobs. "Management decisions which were totally wrong ... cannot be compensated with state funds," said Thomas Steg, German Chancellor Gerhard Schroeder's deputy spokesman. Steg added that even if Berlin wanted to inject cash into the struggling companies it would be impossible to do so given budget deficits and European Union laws against subsidies. Opel is owned by U.S. auto giant General Motors and Steg side-stepped questions on why some 10,000 German workers are likely to lose their jobs at the company's plants in Germany, with the remaining 2,000 cuts in Sweden and Britain. "You can assume there will be talks with GM on this," said Steg, who insisted there was nothing wrong with Germany as place to do business. Germany has some of the highest wages in the world and business leaders complain of high taxes, red tape and lack of flexibility. Steg added, however, GM headquarters in Detroit apparently did not sufficiently understand the role of corporations in Germany and the country's social-market economy. "There are apparently cultural differences," said Steg, who did not elaborate. An economics ministry spokeswoman said Germany would be following up reports on Swedish subsidies linked to GM's Trollhattan, Sweden plant where the company only plans 500 jobs cuts. "I cannot (yet) report any results," said the spokeswoman. Separately, management and union leaders reached a deal Thursday to overhaul the German-owned department store and mail-order company KarstadtQuelle which will lead to the company shedding 5,500 jobs over the next three years. KarstadtQuelle currently employs about 100,000 people. The package will see the ailing retailer making cuts in personnel costs worth 760 million euros (938.3 million dollars) by 2007. A commentary in the newspaper Die Welt said both Opel and KarstadtQuelle had run into problems because their products were seen by consumers as "musty and lower middle class."
