Opel: Fiat, Magna And The 14 Steps To Heaven

Bertel Schmitt
by Bertel Schmitt

In German politics or the corporate world, the secret weapon to destroy any progress is the feared “12 point program.” Any similarities to a 12-step program of substance abusers are purely coincidental. Since there is no way that all 12 points will ever be met, the project languishes and dies on its own with nobody having killed it.

The German government has increased the mega-tonnage of its secret weapon and presented Fiat’s Marchionne with a 14-point program as he visited Berlin on Monday to meet government and union officials. His intent: Secure political (and financial) backing by the end of this month for a dream. Marchionne wants to combine Fiat, Chrysler and Opel/Vauxhall to a car group that cranks out more than 7 million units a year and has combined revenues in excess of $100 billion. Second to Toyota. Bigger than Volkswagen. (That should make the plan popular in Germany.) Not so fast:


One of the many sticking points in the 14-point catalog, presented by Germany’s vice-chancellor Frank-Walter Steinmeier, is that the company must be headquartered in Deutschland, Financial Times reports. Germany didn’t forget that GM moved its European HQ to tax-friendly Switzerland.

And just in case Marchionne wants to move to beautiful Deutschland (Fiat said on Monday that a decision on a future headquarters for the merged group would be “premature”, but added: “Opel is a German company, so it needs a headquarters in Germany.”) there are 13 other conditions.

All Opel factories in Germany must be kept open, Der Spiegel writes, jobs must be kept in Germany. Anyone interested in Opel must prove “experience in the application of complex strategic concepts and the management of global companies.” Synergy and cost reduction measures must be shown. The company must prove that the money the government signs for is safe, that it is not siphoned off elsewhere, and, finally, the successful applicant must win a beauty contest with the unions and the Opel dealers being the jury.

Good luck.

Supposedly, the 14-point program applies to all applicants. Besides Fiat, there are the Canadian-Austrian car parts group Magna International, sovereign wealth funds from Abu Dhabi and Singapore, and three private equity groups.

The 14-step program should bring the list down to two, and it favors Magna. Both unions and dealers already gave their thumbs down to Fiat.

According to Financial Times, “Berlin has no say in which suitor will secure Opel, a decision that rests solely in the hands of General Motors. Yet the government has promised to support the future owner with credit guarantees and, as evidenced by the Steinmeier paper, is using its influence to shape the transaction.”

Marchionne in the meantime plays the cold war card saying, “Magna wants to take over Opel with Russian help. It would surprise me if the German government thinks that this is a good idea.” Someone from Russia will get back to Sergio on this and remind him that Fiat had consorted with the enemy in the 60s. Remember Lada? Togliatti anyone? Remember the hand crank?

A decision of who gets whom and what for how much will be rendered within a few weeks, says Automobilwoche [sub]. Economy minister Karl-Theodor zu Guttenberg says it could happen in May. And so it should. June 1 looms, the day of reckoning at GM.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Fincar1 Fincar1 on May 06, 2009

    I wonder if that stretch Fiat was modified in Cuba, which is where the photo was taken.

  • Martin Schwoerer Martin Schwoerer on May 06, 2009

    OMG. Deripaska (an alleged criminal) together with Magna, or empire-building Marchionne? Both are lousy choices. And the German government is still pretending they can dictate the conditions of sale? "Good luck" is putting it exactly right.

  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
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