VW cuts production as Opel's future hangs in the balance

Porsche and Lower Saxony both raise Volkswagen stakesBerlin - Europe's biggest carmaker Volkswagen AG began Monday its first production break in 25 years as the global auto industry crisis gets worse.

Between 60,000 and 92,000 workers are likely to be hit by the German-based VW group to halt production for a week.

The auto maker hopes to avoid building up overcapacity in its operations in the wake of a sharp slump in car sales around the world.

VW's German rivals Daimler AG, the manufacturer of luxury Mercedes-Benz cars and BMW AG, have already announced plans to cut working hours.

This also comes as Berlin renewed its call for giant US carmaker General Motors' German offshoot Opel to produce a restructuring plan before the government would consider state aid for the ailing group.

"This step must be put forward made before the state can make a decision," said German Economics Minister Karl-Theodor zu Guttenberg on German television ZDF Monday.

GM has unveiled sweeping restructure plans which included big job cuts worldwide and could result in its hiving off parts of its international operations.

Last year Washington let GM and rival Chrysler 17.4 billion dollars to help the two auto groups face up to the car industry crisis.

Opel reportedly needs 3.3 billion euros (4.3 billion dollars) government-backed loan guarantees to help it through the current crisis. However, GM's Swedish SAAB operation has filed for bankruptcy protection.

In the meantime, Germany has opened up talks with the new US Administration on the car sector with Guttenberg expected to travel to Washington for talks. (dpa)

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