Germany on Wednesday rejected General Motors's request for $1.3 billion in aid for the loss-making Opel unit, forcing GM to seek other alternatives for the division's reorganization. Economy Minister Rainer Bruederle said at a press conference in Berlin that he made the final decision not to give financial assistance after a government steering committee was unable to reach agreement. Bruederle said previously GM can afford to cover the costs itself because the Detroit-based carmaker has about $12 billion in free liquidity after fully paying back credits from the U.S. and Canadian governments. GM has been seeking $2.3 billion in aid from European countries to fund a restructuring that includes closing a factory in Antwerp, Belgium, as it eliminates 8,300 of Opel's 48,000 jobs. Europe was the only region where GM posted a loss in the first quarter. The carmaker recorded a $865 million net income in the period. Germany's refusal throws into question how GM will fund the $4.3 billion reorganization after abandoning an agreement backed by German Chancellor Angela Merkel to sell a majority stake in Opel to Magna International Inc. last November. During the 18-month wrangling over Opel's future, which included bids from Italian automaker Fiat and RHJ International, Opel and its British brand Vauxhall have struggled to retain customers. 'Opel's drawn-out efforts to secure state aid has created a huge image problem,' Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg- Essen, said prior to the announcement. 'That loser image is going to stick.' Opel's European market share dropped to 7 percent from 7.6 percent in the first four months of 2010, even though the carmaker late last year introduced a new version of the Astra, its best-selling model, according to statistics from the European Automobile Manufacturers' Association. German lawmakers expressed concern about granting GM money as Merkel's government pushes ahead with planned budget cuts of more than 80 billion euros over the next four years. An outside advisory panel to the government that included former Schering AG Chief Executive Officer Hubertus Erlen and Michael Rogowski, the former head of Germany's main industry lobby group BDI, last week recommended that Germany turn down GM's application. GM filed for bankruptcy protection in June of last year and emerged a month later with Ed Whitacre as chairman. He took over as chief executive officer in December and has shuffled management and cut brands to four from eight. The company has since then repaid $8.4 billion in U.S. and Canadian loans it assumed as it emerged from bankruptcy. With assistance from Ola Kinnander in Stockholm. 