Opel: Abandon All Hope
After having had a look at the calendar, the German government appears to have written off any chances of solving the increasingly puzzling Opel mess before the national elections. (September 27). In an interview with the Frankfurter Allgemeine Zeitung, German Economy Minister Karl-Theodor zu Guttenberg said that Opel has enough money to last through January. Which is code for “don’t expect anything soon.” And he has an ace up his sleeve . . .
What zu Guttenberg didn’t mention: in November the €1.5 billion “bridge loan” provided to Opel by the German government will be due for repayment. If there’s no solution by then, Berlin will have GM by the short & curlies. Guttenberg thinks that “it is not realistic” that GM will come up with the money and the extra billions necessary to keep GM afloat.
Suddenly, Berlin has all the time in the world. “Substance trumps speed,” said Chancellor Angela Merkel, and maintaining German interests is more important than undue haste.
A meeting of the federal government, the stakeholders in the Opel states and GM management was scheduled for today. Cancelled. An inside source said to Dow Jones: “There is no need to talk.” Nobody expects any sudden breakthroughs, says Die Welt. With four weeks to go until the elections, the politicos have to focus their attention on more pressing subjects. Such as whether to allow genetically modified potatoes. Or not.
Guttenberg, who’s ranking on top of the popularity scale in Germany, never liked the bailout. He was always in favor of insolvency. If he still has a job after the elections—and all polling points that way—he’ll most likely do what he always wanted to do: make some Lebensraum for more German German automakers.
And for all of those who thought that the elections could pressure Germany into a sudden decision, Guttenberg has a message: “September 27 never entered my thinking as far as Opel is concerned. It would be absurd.”
Expect all kinds of unpopular measures after the elections. If Berlin demands the loan to be paid back in November, and if GM can’t pay, Opel must declare bankruptcy. That’s the way German law is written.
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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GM seems to think that everyone outside of GM is as stupid and spineless as they are (a perception sadly confirmed by the twits in Congress.) But the Germans are playing this very strategically and will end up getting whatever it is they decide they want out of this soap opera. And GM won't even know what hit them.