Opel Won't Be Chinese

Bertel Schmitt
by Bertel Schmitt

No big surprises in the excruciatingly slow bidding for who will finally take over Opel with the blessing and money of the German government. AFP reports that China’s BAIC has been kicked out of the sluggish race. The field of suitors has been whittled down to Magna and RHJ.

Officially, the race is open and fair. However, it is an open secret that GM favors RHJ, while the German government roots for Magna. GM hopes to be able to buy back a washed, rinsed, and refinanced Opel from a compliant RHJ. Berlin hopes to build a Ribbentropian German/Russian automotive power pact. Says AFP:

“While the final decision lies with GM, the German government is involved as it is set to stump up billions of euros in loan guarantees to sweeten any takeover deal in a bid to save tens of thousands of jobs.” Nothing will be decided without Berlin’s say-so.

A spokesman for Chancellor Angela Merkel said on Wednesday that Berlin’s preference for the Magna proposal—backed by Kremlin-controlled Russian bank Sberbank—was unchanged following an initial examination of the bids. The deal cannot go ahead without Berlin clearing the billions of Euros of loans and guarantees for its preferred candidate, the spokesman added, just in case people weren’t listening.

On paper, the one who puts in the worst bid wins.

BAIC had offered the most capital and wanted the least amount of loan guarantees. BAIC offered €660 million for a 51 percent stake and wanted only €2.6 billion in German government guarantees. To good for government work: BAIC is out.

RHJ is seeking €3.8 billion in state guarantees and would buy a 50.1 percent stake for €275 million.

Magna wants €4.5 billion in state guarantees and offers to invest up to €700 million together with Sberbank.

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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  • Th009 Th009 on Jul 23, 2009

    charly: It is 10% of the market but the companies who will get most of that 10% are Renault, Peugeot, Citroen, Ford, Volvo and the Japanese. Volvo picking up Opel's market share? Surely you jest, as their sales are shriveling away with or without Opel. In any case, so far this year it appears that VW has been the biggest beneficiary of the Opel sales collapse in Europe. Of course the new Polo has played a big part in this (given the scrapping incentives), but as the European market leader you will have to assume that they would take a significant share of any space vacated by Opel in any case.

  • Charly Charly on Jul 24, 2009

    Opel forte is large non luxury cars. Volvo forte is large near luxury cars. If Volvo lowers its price it is in Opel territory. Opel sales collapsed because the sales of the type of cars they are strong in collapsed, not because of fears that they will disappear.

  • 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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