By on July 31, 2009

As time goes on, Opel’s chances to be rescued by an outside investor are dwindling. A member of the German government’s Opel Task Force told Reuters on Thursday that negotiations between GM and the two competing bidders (RHJ and Magna) for Opel could drag on longer than expected. The way it looks, the deal may never close—because GM doesn’t want to. There could be another rich sugar daddy: It’s you.

As far as Magna v.v. RHJ goes, “the process is just not far enough along from today’s point of view,” said Thomas Schaefer. In his day job, he is state secretary in the finance ministry of Hesse. On the Opel Task Force, he represents the interests of his state and three others that are home to Opel manufacturing plants.

Schaefer doesn’t understand what’s keeping GM from signing: “I believe there are only a limited number of issues still open. If one were to sit down and concentrate on working them out, a solution could be found in 24 hours,” Schaefer said.

GM doesn’t seem to look for solutions. They want to drag it out as long as possible. In the GM blog, Smith writes “We still believe this can be closed by the end of September.”

Dear John: You are delusional. The German national elections are on September 28. After that date, you won’t get a cent out of Berlin. Already, there is very little political leverage in Opel. German opinion has turned anti-bailout. Even the Social Democrats and their union buddies are amazingly subdued on the issue. Actually, the union buddies are distancing themselves from the Social Democrats: For the first time, the German metalworkers union will abstain from endorsing a party or candidate.

Dear John: Or maybe, you are not delusional after all. Maybe you never wanted to sell Opel. Maybe you wanted to buy time and collect the German €1.5b bridge loan. The Sueddeutsche Zeitung comes to the same conclusion voiced by TTAC a day earlier: “Quite possibly, GM doesn’t want to sell Opel. Hardliners at GM don’t want to set Opel free and want to keep them at all costs.” In a separate article, the Sueddeutsche writes that there is a scenario in which GM buys back Opel from the German trustees, using American taxpayer’s money. The Sueddeutsche picked up Vietnamesque rumors of “hawks” and “doves” at Government Motors. The hawks want to keep Opel. The doves want to sell Opel to an investor.

Dear John: In your blog, you deny that option, so vehemently that the grammar turns into collateral damage: “GM has not and will not approach the U.S. Treasury for funding to restructure Opel.” You also claim “GM does not seek to reacquire majority control of Opel, from any investor candidate.”

If that is true—honestly, we don’t think it is, unless these sentences are very carefully parsed—what’s keeping you from closing the deal in the 24 hours Herr Schaefer thinks it will take?

Here is the hawkish sentence parsing scenario: Your overlords in D.C. told you not to sell. You didn’t approach the Treasury for funding, Treasury approached you. They give you the money it takes to pay back Berlin’s bridge loan. Opel goes back to GM. That way, majority control doesn’t need to be reacquired from any investor candidate. Sound about right?

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19 Comments on “Editorial: There May Be a New Buyer for Opel. Get a Mirror...”


  • avatar
    paris-dakar

    Could someone remind me, what’s the difference between ‘New’ GM and Old GM? Other than the US Taxpayer fronting the $$$, that is.

  • avatar
    texlovera

    I guess the lesson to be learned from this is, if you obfuscate, lie, and run a company into the ground, the government will show up at your door with a dump truck full of hundos?

  • avatar

    I’d be hard pressed to believe there is an ounce of political will to toss more U.S. money at an automaker.

  • avatar
    ttacfan

    With all the latest better GM car platforms coming from Opel I was questioning the wizdom of selling it off at fire sale prices. Maybe we, taxpayers/GM owners, should keep it if it costs less then amount of our money distributed on the Wall Street as bonuses this month.

  • avatar
    tced2

    I had read that Opel was the center of advanced technology for the auto business for GM. And separating Opel from GM would create problems for the mothership GM to continue to develop new vehicles.

    Note: the “rich sugar daddy” isn’t rich, he just has the most green ink.

  • avatar
    paris-dakar

    I guess the lesson to be learned from this is, if you obfuscate, lie, and run a company into the ground, the government will show up at your door with a dump truck full of hundos?

    You also have to use your Labor Union as a conduit to funnel huge $$$ to the political party in power.

  • avatar
    NN

    GM needs Opel. All of their mainstream cars sit on Opel derived chassis. I know GM Daewoo is taking a larger role with the new Cruze & Theta SUV’s, however, fine tuning is still done by Opel engineers…at least from what I know. Daewoo’s not good enough yet…if the Malibu were built off a Daewoo platform it would be a…Suzuki Verona (i.e. piece of shit). With CAFE, the govt is driving GM to make fuel efficient vehicles. Lord knows GM won’t go back to hiring US engineers to do the work to develop these–it was all outsourced long ago. Daewoo still can’t make a car drive well, so to build competitive fuel efficient cars, GM absolutely needs Opel. Somehow, the US taxpayer will likely take the burden to keep Opel in GM’s hands.

  • avatar
    tced2

    Of course the real end goal is to use the really cheap engineering talent in China. I wasn’t aware that Germany was a cheap place to do business – at least not compared to the US. But at least the German engineers are allowed to deliver the goods.

  • avatar

    -Lord knows GM won’t go back to hiring US engineers to do the work to develop these–it was all outsourced long ago.

    -Of course the real end goal is to use the really cheap engineering talent in China.

    So would this fall under Saving or Creating, in the domestic jobs arena? /cheap shot

  • avatar
    Carzzi

    Hi, I’d like a get a mirror for my Opel.

    Sounds like a fair trade to me.

  • avatar
    Stingray

    GM is not interested in selling Opel. At all. That’s evident.

    There’s simply too much to lose: engineering, platforms, IP. And not just for US products, GM sells Opel derived cars in many countries: Brazil, Argentina, Mexico, Australia, South Africa, China to name just a few.

    They for sure, won’t want to pay royalties on cars which IP belonged to them before. That is if they transfer the IP the new Opel owners.

    I think they haven’t solved yet the how they are going to keep it part. Or not, they’re making time, and I’m sure that’s not for free.

    The risk of getting fucked is there. Let see if they’re smart enough to complete their plan without being caught.

  • avatar
    gamper

    As I recall, GM was trying to make it a conditional sale with the option of buying it back. Since the German Government said no to this clause, this effectively threw a wrench in the works.

    I think GM never wanted to get rid of Opel, I agree with others that is makes no sense to get rid of Opel if it can be saved for a song, relatively speaking.

    Just about every auto pundit agrees that the industry is in for massive consolidation and only those manufacturers with a true global footprint for marketing, sales, etc. will make it out alive. So how is giving up Europe a good move? I will gladly pay a few extra dollars to keep Opel in order to protect my investment in GM.

  • avatar
    th009

    Stingray: They for sure, won’t want to pay royalties on cars which IP belonged to them before. That is if they transfer the IP the new Opel owners.

    The negotiations with Magna had GM owning the IP, and Opel paying royalties to GM, at a fairly substantial rate (don’t have the numbers handy, though, sorry).

    Even so, that would leave a big hole in GM’s engineering capabilities for future products.

  • avatar
    menno

    gamper, GM has a European presence outside of Opel (and Vauxhall rebadges in the UK), in the sale of “Chevrolets” (i.e. GMDaewoo cars).

  • avatar
    fincar1

    I like the photo, an old 60′s Opel with an Istanbul license plate. Wonder when it was taken.

    I knew Japanese cars were here to stay when I started seeing retired ones in eastern Oregon and Nevada.

  • avatar
    akear

    Since when did Detroit become such a second rate engineering concern. I can now only think of a handful of US cars engineered and designed in North America.

  • avatar
    KatiePuckrik

    The amount of money, time, resources, newspaper space, etc, that has been dedicated to this circus, it would have been easier just to shut Vauxhall/Opel down.

    Now, I know I’m a socialist and that it is easy for me to say “shut it down” when it isn’t my job on the line, but Europe (like the United States) prides itself on a capitalist market (the EU has a division dedicated to competition, Neelie Kroes, ring a bell?), so therefore, stick to capitalist rules.

    Losing Vauxhall and Opel would single-handedly provide the correction which the European car market needs. The loss of sales from Vauxhall/Opel would be taken up by other car makers and the government can use taxpayers’ money for something else (health care, defence, education, you know, all that stuff which makes a country run).

    The sad part of this is that the people who really hold the power here (GM management, Unions, European governments) are the people who are playing nothing more than a poker game with a worthless prize.

    GM want to keep a car company, but are keeping up a pretence that they want to sell.

    The German government are trying to buy votes for an election which is looking increasingly unlikely for them to win.

    And the unions are fighting for jobs which are, actually, surplus to requirements.

    Is anything worth saving here?

    Ironically the cheapest option is also the best option. So the next time your government (doesn’t matter where) says “We want to find the cheapest option to save taxpayers’ money” don’t believe the hype…..

  • avatar
    dolorean23

    I realize I’m just shouting in the dark here, but isn’t this article mostly conjecture? Would it really spell Armageddon if GM were to keep Opel? Maybe keep making cars that don’t suck there so the US can get cars that don’t suck here?

  • avatar
    charly

    @akear

    GM lost the plot in the early 1960′s

    @KatiePuckrik

    EU claims to be a free market economy but Europe itself doesn’t believe in it which is a big difference with the US were to many people have drunk the kool-aid.

    Overproduction in the EU is so massive that closing Opel won’t be enough. There is also the “Russia Nuclear physicist fear” except this one isn’t make-believe. They fear that the Chinese (or Indians) will buy the Opel development center for cheap.

    German government isn’t trying to buy votes otherwise they would have closed Opel. Many more votes in it. They try to do what is good for Germany (kicking out the Americans and partnering Opel up with the Russians)

    Saving Opel is a few billion. Opel will have at least 20k employees after everything has settle down. that isn’t even 100k per employee which makes it the cheapest option.

    @dolorean23

    The Germans want GM dead. Without Opel GM has big survival problems


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