Fears over Opel plant 'very big'

The head of the German state that is home to Opel's threatened engine and parts plant has said that his fears for its future are now "very, very big".

The comments of Kurt Beck, the state premier of Rhineland-Palatinate, came following a meeting with Fiat chief executive Sergio Marchionne.

Mr Machinonne met regional German leaders as he continues plans to buy Opel from its US owner General Motors.

Fiat has already said the engine plant in Kaiserslautern is likely to shut.

This is because Fiat already makes many of the same engines at its own facility in southern Italy.

'Growing fears'

Following the meeting with Mr Marchionne, Mr Beck said that "the question marks concerning the interests of Opel and its German production plants - above all Kaiserslautern - have grown rather than diminished". The Kaiserslautern facility employs about 3,400 people.

Fiat wishes to buy General Motor's European business, which is called GM Europe.

GM Europe makes Opel cars, which are called Vauxhall in the UK.

It also includes Sweden-based Saab, but reports suggest Fiat is not interested in buying that business.

Germany's Economy Minister Karl-Theodor zu Guttenberg said on Friday that he hoped Canadian car parts firm Magna would continue with its rival interest in buying GM Europe. However, analysts say Fiat still remains by far the most likely buyer.

Pace of US job losses is slowing

The US economy lost 539,000 jobs in April, fewer than in previous months, in a sign that the US jobs market might be beginning to improve.

April's figure was better than the 600,000 economists were expecting and below March's revised 699,000 jobs.

The Labor Department said that the unemployment rate rose to 8.9%, its highest level since 1983 and up from 8.5% in March.

Since December 2007, the US economy has lost 5.7 million jobs.

The data showed job losses across most sectors of the economy, although hiring picked up in education, health services and government. Chris Rupkey, an economist at Bank of Tokyo Mitsubishi said the economy may have reached a turning point and the labour market could begin to improve.

"The economy doesn't turn on a dime but it does look as if the pace of job losses is starting to slow from the turn of the year," Mr Rupkey said.

"You can make the case that the panic layoffs that we saw at the turn of the year are starting to ease."

There have been some signs that the worst of the recession in the US may be over.

Consumer spending, which plunged in the last half of 2008, grew in the first quarter of this year and some recent data on the housing market has been more upbeat.

The head of the US central bank, Ben Bernanke, has said he expects the recession to end this year unless there is a major financial setback.

But others are less optimistic and predict that unemployment will decline further.

"It's a terrible number but an improvement relative to the very terrible numbers we had before," said Jay Mueller, senior portfolio manager at Wells Capital Management.

"The big question is, has the peak in job losses hit? I am somewhat sceptical that we have seen the absolute worst of it."

Banks unveil cash-raising plans

US bank Wells Fargo has said it plans to raise $7.5bn (£4.9bn) from selling new shares, a day after the US Treasury said 10 banks needed to boost reserves.

Morgan Stanley is also hoping to raise $3.5bn from share sales.

Bank of America said it planned to sell assets and raise capital to secure the $33.9bn it needs.

On Thursday, the US Treasury said that 10 of America's 19 largest banks needed to raise a combined total of $74.6bn of extra funds.

That was the main finding of the so-called "stress tests" which were carried out to see if the banks had sufficient capital to cope should the recession worsen.

The banks that require extra capital have been given until 8 June to finalise their plans to do so, and get them approved by regulators.

Separately, Fannie Mae, the mortgage finance company, has said it needs an extra $19bn in government aid after reporting a loss of $23.2bn for the first quarter.