Reuters newsagency says Opel has agreed to a restructuring plan that aims to save as many jobs and factories as possible but requires 3.3 billion Euros (US$4.18 billion) in state aid.
Quoting GM officials it says the idea is to split off Opel into a separate unit that would remain linked to its stricken US parent while letting outside investors take a stake of more than 25 per cent.
GM Europe President Carl-Peter Forster told a news conference on Friday that GM Europe would include the UK unit, Vauxhall, into the new corporate entity and the spinoff could range from 25 percent to 50 percent of the company.
There are still no decisions about plant closures or forced layoffs, Mr Forster said. Using conservative market assumptions the restructuring is expected to make GM Europe/Opel profitable by 2011.
The Opel supervisory board meeting came a day after thousands of workers protested in Russelsheim, German, calling for an independent Opel after 80 years as a unit of GM. It is the first carmaker in Europe to ask for government support to survive.
German Chancellor Angela Merkel, facing an election in September, wants to save as many of the roughly 25,000 German jobs at Opel as possible and the government has said it will consider granting financing guarantees once it has seen the revamp plan.
The plan has now been submitted to the German government and the governments in Belgium, Spain and the UK where Opel/Vauxhall has plants.
Opel is looking for state aid in the form of credit guarantees or outright loans and wants trade unions to contribute hundreds of millions of Euros in savings in order to bridge a liquidity gap.
The trade unions, however, want to share job cuts across European plants like Germany's Bochum factory, Antwerp in Belgium and Ellesmere Port in Britain, to save any single site from being closed.
Reports say Opel dealers across Europe have indicated a willingness to take a financial stake in the restructured independent company to help save it, and their livelihoods.
Opel produces the Astra range that is sold in Australia by GM Holden and in the past has also produced the Barina, in addition GM Holden sells a modified version of the Commodore-based HSV range to Vauxhall.