General Motors (GM) has made direct approaches for financial help to the governments of the European countries in which it operates.

The American company has given warning that it could run out of cash next month and its European subsidiaries want to secure financial help in case their cashflow is cut. This month Opel, GM's German division, asked Berlin for €1 billion (£843 million) in help if GM filed for bankruptcy. Now it has emerged that GM Europe has also approached governments in Britain, Spain, Sweden, Belgium and Poland to try to secure sources of cash. In Britain, the weak state of GM has prompted concern for its Vauxhall plant on Merseyside.

GM's move comes before a European Commission announcement of help for the car industry as part of its recovery plan for the European economy. The European Investment Bank will make substantial sums in soft loans available to car manufacturers in the European Union for projects to improve ecological design and technology. Günter Verheugen, the German Commissioner responsible for industry, has pushed for the new loan facility after carmakers, including Acea, the European car industry body, called for €40 billion to fund research and development into energy efficiency and lower fuel consumption of new vehicles.

The EU has strict rules against state aid, so money to industry must be intended for very clear purposes and cannot constitute survival funds. EU sources have said that carmakers are unlikely to get the €40 billion they want, partly because the construction and manufacturing industries also want financial help for green projects.

Times are tough and getting tougher for carmakers and many have already cut their output temporarily. GM Europe said: “While European and global governments worked quickly to address the financial crisis with direct support to banks, the effects are now being felt across the entire economy. Vehicle sales in Europe have dropped significantly since July, which means revenues for all automakers, including GM, have declined significantly. At the same time, regulatory requirements on vehicle manufacturers are at a very high level . . . This is creating a near-term liquidity crunch for many automakers.”

GM, Ford and Chrysler had a difficult time last week when they tried to convince American politicians to give them $25 billion (£16.1 billion) in emergency loans to help the industry. A decision is expected next month. Barack Obama, the US President-elect, has emphasised that there will not be a blank cheque without a defined plan from the car industry.

The leaders of carmakers based in Britain will meet Lord Mandelson, the Business Secretary, tomorrow to press their case for assistance.

Jaguar Land Rover, which is owned by Tata, of India, has already asked the Government for help in securing a £1 billion loan. Porsche, the luxury carmaker, yesterday added its name to the long list of manufacturers closing factories temporarily to cut output. It will close its Stuttgart plant for seven days by the end of January.

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