Berlin - German Chancellor Angela Merkel said Saturday that conditions were not ripe for state to aid troubled carmaker Opel, but stressed her government was looking for a solution.

"We will provide assistance if the benefits for the people outweigh the losses. Unfortunately, we have not yet reached this point," the chancellor said in her weekly podcast.

At talks with German Economics Minister Karl-Theodor zu Guttenberg on Friday, Opel's US parent General Motors (GM) promised to revamp a rescue plan dismissed by the government as inadequate.

"The concept needs to be improved and clarified," said the chancellor, who promised to do everything in her power to find a solution acceptable to Opel's 25,000 employees.

Opel has requested 3.3 billion euros (4.1 billion dollars) in state guarantees, but is believed to require a much larger sum if it hopes to stay afloat.

The complex ownership structures between Opel and its Detroit- based parent company need to be taken into consideration before Germany pledges any financial assistance, analysts said.

Germany is wary of providing state aid to Opel without guarantees that the money will not be siphoned off to the United States.

German Interior Minister Wolfgang Schaeuble suggested Friday that Opel should consider going into insolvency, saying such a move would not mean that the company would go bankrupt.

On Saturday, Deputy Economics Ministry Dagmar Woehrl said Opel could avoid going belly-up only if this quickly provided "an improved outlook."

She said it was "highly questionable and unlikely" that the government would pump large amounts of taxpayers' money into a company that plans to close plants and lay off thousands of workers.

The Rheinische Post newspaper said Saturday that Opel plans to close one of its four factories in Germany and make 5,110 production workers redundant as part of efforts to save the company.

The report said the factory in the east German town of Eisenach would be sold along with a plant at Trollhatten in Sweden. GM was also applying pressure on Opel to shut down its plant at Antwerp in Belgium, the newspaper said, quoting sources on Opel's board.

Like many other automobile manufacturers, Opel and GM have been hit by a massive fall-off in sales triggered by the global economic downturn.

Last week GM posted a 30.9-billion-dollar loss for 2008 and issued a warning that 2009 would be a challenging year, despite receiving 13.4 billion dollars in aid from the US government.

GM has plants operated by subsidiaries Belgium, Poland, Spain and Sweden in addition to those in Germany and Britain.

With general elections due on September 27, the future of Opel has become a high-profile political issue in Germany. (dpa)