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General Motors Co. will fund a major restructuring of Opel and Vauxhall without state aid after the automaker decided to withdraw applications for government loan guarantees from European governments.

GM plans a 3.3 billion euro ($4 billion) reorganization to cut its European capacity by 20 percent and workforce by a fifth, and rejuvenate the bulk of Opel’s model lineup through the end of 2014.

Last week, the German government refused GM’s request for 1.1 billion euros in loan guarantees from the country’s state rescue fund for companies hit by the economic recession. The UK and Spain had earlier indicated they would be willing to provide state aid sought by GM from European countries with Opel factories.

Opel CEO Nick Reilly said today the company could not afford to have uncertain funding plans and new time-consuming complex negotiations at a time when GM Europe needs to keep investing in new products and technologies.

“In these circumstances, and given the need to progress the plan quickly, it has been decided to fund the requirements internally. GM’s recently improved financial strength has also been a catalyst for making this decision,” Opel said in a statement.

Reilly said Opel’s funding needs have not changed, adding: “We are grateful for the support of our parent company, which will allow us to move forward with confidence in this very competitive industry.”

With new products and the impact of restructuring, Opel expects to return to profitability shortly, Reilly said.

GM’s European operations have lost $1.3 billion since the automaker exited bankruptcy last year. It was the only GM region to lose money in the first quarter.

GM has already agreed to contribute 1.9 billion euros of U.S. taxpayer funding to keep Opel afloat. For months the company had insisted it needed European governments to pitch in to restructure its money-losing European unit.

But GM’s turnaround from bankruptcy to profitability in just 12 months, which helped it hang on to Opel, undermined the unit’s efforts to win state aid. In the first quarter, GM earned $865 million worldwide – its first quarterly profit since 2007.

Excluding funds in escrow, GM had gross cash of $23.3 billion at the end of March compared with $14.2 billion in debt. Its first-quarter funds from operations exceeded capital expenditure by about $1 billion.

GM has also rankled the German government, which last year brokered a deal to sell the carmaker to Canada’s Magna International. But at the last minute GM decided to keep and restructure Opel rather than sell it.

Opel said it will now be able to fully implement a new strategic plan, in particular investments in future products that were announced in February.

As part of GM’s bid for European aid, the UK had committed guarantees for 330 million euros of bank loans and the Spanish government indicated they would approve a similar amount.

German federal states with Opel factories expressed a willingness last week to enter into new negotiations about aid.

In a restructuring plan unveiled last year, GM said it would reduce 8,300 of 48,000 jobs across Europe, with 4,000 cuts coming in Germany.

The automaker is eager to have a turnaround plan in Europe in place before proceeding with a planned stock offering and emerge from U.S. government control, possibly as early as this fall.